As expected, PACCAR delivered 45% more trucks during the first quarter. Thanks to rising freight rates and tonnage, the trucking industry is performing pretty well. And it's not just the demand for new trucks. The fleet is aging fast, too, thus pushing the need to replace aging vehicles, particularly in markets like the U.S. and Canada. This was a key factor that drove PACCAR's revenue up by a handsome 48% in the first quarter. Revenue from the U.S. and Canada shot up 84% from the year-ago period, making up for a 6% slump in revenue from Europe.
Sunny days ahead
That the trucking industry is showing signs of a strong rebound is evident from the latest industry data. After climbing 5.9% in 2011, overall truck tonnage was up 3.1% in January and 5.5% in February, over respective year-ago periods. The American Trucking Association's Annual Trend Report also highlighted the way the market is picking up.
While enjoying the revival in the North American truck market, PACCAR is also revving up efforts to increase its foothold in markets abroad. Construction at its new heavy-duty DAF trucks facility in Brazil, which was flagged off some months back, is well on schedule, and the plant should be operational by mid-2013.
PACCAR is particularly upbeat about the two new "next-generation" truck models it launched last month. Kenworth and Peterbilt, the brands under which the models were launched, have been doing very well lately. The share of these brands in the U.S. and Canada heavy-duty Class 8 market hit a record high of 28.1% last year. Currently, they are behind Navistar International
The Foolish bottom line
Superb performance, great growth plans, and encouraging industry trends -- PACCAR's clearly on a high. The story gets even better with PACCAR raising its quarterly dividend to $0.20, from $0.18.
Well-poised to take advantage of the reviving truck industry, PACCAR certainly deserves a spot in your watchlist. Click here to add PACCAR to your free stock-tracking watchlist.
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Fool contributor Neha Chamaria does not own shares of any of the companies mentioned in this article. Motley Fool newsletter services have recommended buying shares of PACCAR. The Motley Fool has a disclosure policy.
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