UPDATE 4-Paccar profits jump, boosts truck sale outlook

Tue Apr 19, 2011 2:52pm EDT

* Q1 EPS 53 cents vs Wall Street view 49 cents

* Revenue $3.28 bln vs Street estimate $2.98 bln

* Sees heavy truck sales 200,000-220,000 vs 126,000 yr ago

* Tire availability a concern

* Shares rise 4 pct (Adds analyst comments, commodities price gains, byline)

By Lynn Adler

NEW YORK, April 19 (Reuters) - Paccar Inc (PCAR.O) reported a quarterly profit that beat Wall Street estimates as sales of trucks and truck parts improved with the economy, and the company increased its sales outlook for heavy-truck sales.

The company, which makes trucks under the Peterbilt, Kenworth and DAF brands, said it expects to deliver up to 20 percent more trucks in the second quarter than the first quarter, subject to suppliers' ability to meet demand for tires and other parts.

"North American and European economies are recovering, with the exception of the residential and commercial construction markets in the United States," said Mark Pigott, chief executive.

It revised upward its 2011 forecast for industry retail sales of Class 8 heavy trucks to a range of 200,000 to 220,000 -- the highest since 2006 -- from its February forecast of 180,000 to 200,000 trucks.

In addition to supply disruptions caused by Japan's March 11 earthquake and tsunami, rubber and other commodities prices have spiked.

"We're looking at, if we can, depending on the market's appetite, having pricing adjustments on a regular basis -- that could be every month, that could be every two months -- to reflect the rapidly increased commodity pricing," Pigott said on a conference call with analysts.

Rubber costs have soared about 200 percent since 2009, he added. Other commodities prices including carbon for steel, copper and palladium have risen as much as 70 percent during that time.

Paccar on Tuesday reported a first-quarter profit of $193 million, or 53 cents a share, sharply above the $68.3 million, or 19 cents a share, it earned a year earlier.

Revenue increased more than 47 percent to $3.28 billion.

Analysts, on average, had expected Bellevue, Washington-based Paccar to report a profit of 49 cents a share on revenue of $2.98 billion, according to Thomson Reuters I/B/E/S.

The company's shares, which have fallen more than 10 percent this year, were up 4 percent, or $1.99, at $52.32 in afternoon trading.

JPMorgan analysts said they maintain a year-end $61 price target. While production is expected to increase, margins will will be steady in the second quarter as the product mix changes from parts to lower margin trucks, JPMorgan said in a report.

"That said, Paccar's CEO noted that the pricing environment is better today vs. one quarter ago and pricing is likely to remain better with the cyclical recovery," JPMorgan said.

Sixty percent of the expected jump in second-quarter truck sales would likely come from North America, Pigott said.

Pigott said Paccar was looking at "conservative steps" in China and India, as well as deploying some funds in Brazil and possibly Central Europe and Russia, and that it will consider possible acquisitions. (Reporting by Lynn Adler, editing by Steve Orlofsky and Maureen Bavdek)