PACCAR Financial Services (PFS), which has assets valued at $7.5 billion and includes truck leasing unit PacLease, said profit increased in the second quarter due to better finance margins and reduced credit losses.

Second quarter pretax income improved to $34.0 million compared to $15.6 million earned in the second quarter of 2009.

The provision for credit losses was $20.2 million in the second quarter compared to $29.1 million in the second quarter of 2009. Second quarter revenues were $239.3 million compared to $246.6 million in the same quarter of 2009.

For the six-month period, pretax income was $62.1 million compared to $30.9 million in 2009. First-half revenues were $485.7 million, compared with $502.4 million for the same period a year ago.

"Higher freight volumes have led to improved used truck prices worldwide, with values up 5-10% compared with 2009. Our customers' improved profitability has resulted in lower past-dues and credit losses compared to last year," said Tim Henebry, president, PACCAR Financial Corp.

"We continue to enjoy excellent access to the commercial paper, medium-term note and syndicated loan markets, allowing PFS to profitably support the sale of PACCAR trucks in 20 countries on three continents at a time when many third-party lenders have exited the transportation finance business."

In its outlook for the truck market, Dan Sobic, PACCAR executive vice president, said Class 8 industry retail sales in the U.S. and Canada are expected to be in the range of 110,000-130,000 vehicles in 2010, reflecting the "uneven economic recovery, high unemployment, and the continued low level of housing starts and auto production."

"There are some encouraging signs as freight tonnage continues to modestly increase and our customers' profitability benefits from stable fuel prices and recent improvements in freight rates," said Sobic. "Truck retail sales are still below replacement demand levels, resulting in the North American truck average fleet age of nearly seven years. The truck industry demand for parts and service business has improved due to increasing freight tonnage, higher fleet utilization and increased maintenance for the aging truck population."

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