PACCAR Achieves Excellent Quarterly Revenues and Profits

Rhea-AI Summary

PACCAR reported excellent revenues and net income in Q2 2024, with net income of $1.12 billion ($2.13 per diluted share) and net sales of $8.77 billion. For the first half of 2024, PACCAR achieved net income of $2.32 billion ($4.40 per diluted share) and net sales of $17.52 billion. Key highlights include:

• Global truck deliveries of 48,400 units
• PACCAR Parts revenues of $1.66 billion
• PACCAR Financial Services pretax income of $111.2 million
• Capital investments of $219.6 million and R&D expenses of $117.1 million

The company maintains a strong market position in North America and Europe, with plans for expansion and investment in new technologies and facilities.

Positive

• Net income of $1.12 billion in Q2 2024, with $2.32 billion for the first half
• Net sales and financial services revenues of $8.77 billion in Q2, $17.52 billion for first half
• PACCAR Parts achieved revenues of $1.66 billion in Q2
• Peterbilt and Kenworth achieved a combined class 8 market share of 31.5% in first half 2024
• DAF Brasil's market share increased to 10.3% in the above 16-tonne truck segment
• PACCAR Financial Services earned pretax income of $111.2 million in Q2
• Capital investments estimated to be $725-$775 million for the year

Negative

• Q2 net income decreased from $1.22 billion in 2023 to $1.12 billion in 2024
• Q2 net sales slightly decreased from $8.88 billion in 2023 to $8.77 billion in 2024
• PACCAR Financial Services Q2 pretax income decreased from $144.7 million in 2023 to $111.2 million in 2024

Insights

Financial Analyst

PACCAR's financial performance in Q2 and the first half of 2024 presents a robust picture despite slight dips in quarterly comparisons. For Q2, PACCAR reported a net income of 1.12 billion and revenues of 8.77 billion. While these numbers are slightly lower compared to the same period last year (1.22 billion in net income and 8.88 billion in revenues), it's important to note that the overall first-half performance shows an upward trend. For the first half of 2024, PACCAR's net income rose to 2.32 billion from 1.96 billion in the same period last year (excluding non-recurring charges).

The increase in net income and stable revenue growth suggest a healthy financial standing and operational efficiency. PACCAR's capital investments in new technologies and manufacturing capabilities indicate a strong commitment to long-term growth. This is further complemented by a solid cash flow from operations (440 million in Q2 and 1.91 billion in the first half), ensuring the company can continue to fund its strategic initiatives without financial strain.

Market Research Analyst

PACCAR's strong market position is evident from its truck market performance and initiatives. In the U.S. and Canada, the company achieved a combined Class 8 market share of 31.5 in the first half of 2024, up from 27.7 last year. This indicates successful penetration and brand recognition in the North American market. Additionally, the European market shows a positive trend with DAF Brasil increasing its market share to 10.3 from 9.2 last year in the above 16-tonne truck segment.

Strategic investments in infrastructure, such as the new parts distribution centers and the Amplify Cell Technologies battery joint venture, suggest that PACCAR is positioning itself well for future market demands, particularly in sustainable transportation solutions. This proactive approach to market expansion and innovation could drive long-term growth and enhance competitive advantage.

Tech Expert

The announcement of the Amplify Cell Technologies joint venture is particularly noteworthy. This collaboration with Cummins, Daimler Truck and EVE Energy to form a 21-gigawatt hour battery factory represents a significant step towards electrification in the trucking industry. Scheduled to start production in 2027, this factory will enable PACCAR to offer cost-effective, premium quality battery electric powertrains.

This initiative aligns with the growing trend towards sustainability and reduced carbon emissions in transportation. By investing in advanced battery technology, PACCAR is not only enhancing its product offerings but also addressing the increasing regulatory pressure for greener solutions. This could attract environmentally conscious customers and potentially open up new market segments, thus positively impacting the company's future profitability.

BELLEVUE, Wash.--(BUSINESS WIRE)-- “PACCAR achieved excellent revenues and net income in the second quarter of 2024,” said Preston Feight, chief executive officer. “PACCAR’s truck and Parts operations achieved robust quarterly sales and profits due to industry-leading trucks and strong aftersales performance that enhanced customer uptime. PACCAR Financial Services delivered good profitability due to its growing, high quality portfolio. I am very proud of our employees for delivering industry-leading trucks and transportation solutions to our customers.”

Peterbilt 579, Kenworth T680 and DAF XG+ Trucks (Photo: Business Wire)

PACCAR earned net income of $1.12 billion ($2.13 per diluted share) in the second quarter, compared to $1.22 billion ($2.33 per diluted share) earned in the same period last year. Second quarter net sales and financial services revenues were $8.77 billion, compared to $8.88 billion achieved in the second quarter of 2023.

PACCAR reported net income of $2.32 billion ($4.40 per diluted share) in the first half of 2024, compared to net income of $1.96 billion ($3.73 per diluted share) earned in same period last year, which included a $446.4 million after-tax, non-recurring charge related to civil litigation in Europe. Excluding the non-recurring charge, the company earned adjusted net income (non-GAAP)¹ of $2.40 billion ($4.58 per diluted share) in the first half of 2023. Net sales and financial services revenues for the first six months of 2024 were $17.52 billion, compared to $17.35 billion achieved last year.

Financial Highlights – Second Quarter 2024

Highlights of PACCAR’s financial results for the second quarter of 2024 include:

• Consolidated net sales and revenues of $8.77 billion.
• Consolidated net income of $1.12 billion.
• Global truck deliveries of 48,400 units.
• PACCAR Parts revenues of $1.66 billion.
• PACCAR Parts pretax income of $413.8 million.
• PACCAR Financial Services pretax income of $111.2 million.
• Capital investments of $219.6 million and R&D expenses of $117.1 million.
• Cash generated from operations of $440.0 million.
• Stockholders’ equity of $17.70 billion.

Financial Highlights – First Half 2024

Highlights of PACCAR’s financial results for the first six months of 2024 include:

• Consolidated net sales and revenues of $17.52 billion.
• Consolidated net income of $2.32 billion.
• Capital investments of $383.9 million and R&D expenses of $222.6 million.
• PACCAR Parts pretax income of $869.6 million.
• PACCAR Financial Services pretax income of $225.1 million.
• Cash generated from operations of $1.91 billion.
• Medium-term note issuances of $1.71 billion.

____________________

¹ See attached supplementary information on non-GAAP financial measures.

Global Truck Markets

U.S. and Canada Class 8 truck industry retail sales are estimated to be in a range of 240,000-280,000 trucks in 2024. Peterbilt and Kenworth achieved a combined class 8 market share of 31.5% in the first half of 2024, compared to 27.7% in the same period last year. “Peterbilt and Kenworth’s premium quality trucks provide exceptional durability and reliability. The Kenworth and Peterbilt industry-leading vocational trucks are an important contributor to the success of infrastructure investments in North America,” said Darrin Siver, PACCAR executive vice president.

Harald Seidel, DAF president, shared, “Aerodynamic DAF trucks are delivering the highest fuel efficiency in the industry, which reduces customers’ operating expenses.” European truck industry registrations in the above 16-tonne segment are estimated to be in a range of 260,000-300,000 vehicles this year.

Mike Dozier, PACCAR executive vice president, said, “DAF’s industry-leading quality trucks, complemented by PACCAR Parts, PACCAR Financial Services and DAF’s premium dealerships, are driving DAF Brasil to higher market share.” DAF Brasil’s market share was 10.3% in the above 16-tonne truck segment in the first six months of this year, compared to 9.2% in the same period last year. The South American above 16-tonne truck market is estimated to be in the range of 105,000-115,000 units this year.

PACCAR Parts Achieves Excellent Quarterly Revenues and Profits

PACCAR Parts earned excellent quarterly pretax income of $413.8 million in the second quarter of 2024, compared to $419.3 million earned in the same period last year. PACCAR Parts achieved quarterly revenues of $1.66 billion in the second quarter, compared to $1.60 billion reported in the same period last year. PACCAR Parts first half 2024 revenues were $3.34 billion, compared to $3.22 billion in the same period last year. PACCAR Parts achieved pretax profit of $869.6 million in the first six months of 2024, compared to $857.9 million earned in the first six months of 2023.

“PACCAR Parts delivers greater uptime and profitability for customers by delivering the right part in the right place at the right time,” said Laura Bloch, PACCAR vice president and PACCAR Parts general manager. “PACCAR Parts’ excellent performance reflects investments in its TRP all-makes parts program, strategic technology-driven transportation solutions such as managed dealer inventory, and a growing number of PACCAR trucks with PACCAR powertrains in operation.”

PACCAR Parts’ 19 global parts distribution centers (PDCs) support more than 2,300 DAF, Kenworth and Peterbilt dealer locations. PACCAR is constructing a new 240,000 square-foot PDC to be opened in Massbach, Germany, this year. The new PDC will enhance parts delivery to dealers and customers in the largest truck market in Europe.

Financial Services Companies Achieve Good Quarterly Results

PACCAR Financial Services (PFS) earned pretax income of $111.2 million in the second quarter this year, compared to $144.7 million in the second quarter of 2023. PFS achieved second quarter 2024 revenues of $509.8 million, compared to $439.8 million in the same period last year. For the first six months of 2024, PFS earned pretax income of $225.1 million, compared to $293.5 million last year. “PFS achieved good first half results due to its growing, high quality portfolio. The used truck market has normalized after a period of high volume and prices,” said Todd Hubbard, PACCAR vice president. “PFS is a leader in the market with its superior Kenworth, Peterbilt and DAF products, innovative technologies that provide seamless credit application and loan servicing processes, and its support of customers in all phases of the business cycle.”

PFS has a portfolio of 229,000 trucks and trailers, with total assets of $21.33 billion. PacLease, a major full-service truck leasing company in North America, Europe and Australia with a fleet of 41,000 vehicles, is included in this segment.

“PACCAR’s excellent balance sheet, complemented by its A+/A1 credit ratings, enables PFS to offer competitive retail financing to Kenworth, Peterbilt and DAF dealers and customers in 26 countries on four continents,” said Craig Gryniewicz, PACCAR Financial Corp. president. PACCAR Financial Services has excellent access to the debt markets, and issued $1.71 billion of medium-term notes during the first half of 2024.

Capital and R&D Investments in Products, Technologies and Facilities

PACCAR’s excellent long-term profits, strong balance sheet, and consistent focus on quality, technology and productivity have enabled the company to invest $8.2 billion in new and expanded facilities, innovative products and new technologies during the past decade. Capital investments have increased and are estimated to be in a range of $725-$775 million, and research and development expenses are projected to be in a range of $460-$480 million, this year. “PACCAR is investing in new powertrains, advanced manufacturing capabilities and capacity, and aftermarket distribution capabilities that will create value for our customers,” said Harrie Schippers, president and chief financial officer. “PACCAR is investing more than $200 million in additional engine manufacturing capacity, and in the construction of a new engine remanufacturing facility, in Columbus, Mississippi. Recent truck factory investments include the expansion at Kenworth Chillicothe, Ohio, and PACCAR Mexico, and the DAF new electric truck assembly plant in Eindhoven, Netherlands.”

PACCAR Battery Joint Venture Groundbreaking

In the second quarter, PACCAR, Cummins, Daimler Truck and EVE Energy completed the formation of their U.S. battery manufacturing joint venture, Amplify Cell Technologies, and began construction of its 21-gigawatt hour (GWh) battery factory in Marshall County, Mississippi. The factory is expected to start production in 2027. “Amplify Cell Technologies will enable PACCAR to offer customers cost-effective premium quality battery electric powertrains that meet their operational and sustainability needs,” said John Rich, PACCAR senior vice president and chief technology officer. “We are pleased to begin this exciting venture with these world class partners.”

PACCAR will hold a conference call with securities analysts to discuss second quarter earnings on July 23, 2024, at 9:00 a.m. Pacific time. Interested parties may listen to the call by selecting “Q2 Earnings Webcast” at PACCAR’s homepage. The Webcast will be available on a recorded basis through July 30, 2024. PACCAR shares are listed on the NASDAQ Stock Market, symbol PCAR. Its homepage is www.paccar.com.

This release contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act. These statements are based on management’s current expectations and are subject to uncertainty and changes in circumstances. Actual results may differ materially from those included in these statements due to a variety of factors. More information about these factors is contained in PACCAR’s filings with the Securities and Exchange Commission.

PACCAR Inc
SUMMARY STATEMENTS OF OPERATIONS
(in millions except per share amounts)
	Three Months Ended							Six Months Ended
	June 30							June 30
		2024			2023				2024			2023
Truck, Parts and Other:
Net sales and revenues	$	8,262.3		$	8,441.3			$	16,497.3		$	16,491.4
Cost of sales and revenues		6,772.3			6,851.7				13,446.1			13,344.8
Research and development		117.1			101.3				222.6			198.5
Selling, general and administrative		142.7			144.9				290.3			304.7
Interest and other (income) expenses, net		(23.6	)		(17.7	)			(50.6	)		561.1	(1)
Truck, Parts and Other Income Before Income Taxes		1,253.8			1,361.1				2,588.9			2,082.3
Financial Services:
Revenues		509.8			439.8				1,019.1			863.0
Interest and other		346.1			253.3				686.4			489.4
Selling, general and administrative		40.8			37.0				79.8			72.2
Provision for losses on receivables		11.7			4.8				27.8			7.9
Financial Services Income Before Income Taxes		111.2			144.7				225.1			293.5
Investment income		95.8			62.7				181.3			111.7
Total Income Before Income Taxes		1,460.8			1,568.5				2,995.3			2,487.5
Income taxes		338.2			347.4				677.4			532.5
Net Income	$	1,122.6		$	1,221.1			$	2,317.9		$	1,955.0
Net Income Per Share:
Basic	$	2.14		$	2.33			$	4.41		$	3.73
Diluted	$	2.13		$	2.33			$	4.40		$	3.73
Weighted Average Shares Outstanding:
Basic		525.3			523.8				525.1			523.6
Diluted		526.6			524.8				526.5			524.6
Dividends declared per share	$	.30		$	.25			$	.57		$	.50

(1) Includes a $600.0 million non-recurring charge related to civil litigation in Europe (EC-related claims) in the first quarter 2023.

PACCAR Inc
CONDENSED BALANCE SHEETS
(in millions)
	June 30				December 31
		2024				2023
ASSETS
Truck, Parts and Other:
Cash and marketable securities	$	7,803.8			$	8,659.3
Trade and other receivables, net		2,731.3				2,198.1
Inventories, net		2,783.0				2,576.7
Property, plant and equipment, net		3,895.9				3,780.1
Equipment on operating leases and other, net		2,629.8				2,645.3
Financial Services Assets		21,332.8				20,963.9
	$	41,176.6			$	40,823.4
LIABILITIES AND STOCKHOLDERS' EQUITY
Truck, Parts and Other:
Accounts payable, deferred revenues and other	$	7,348.2			$	9,015.8
Financial Services Liabilities		16,125.5				15,928.8
STOCKHOLDERS' EQUITY		17,702.9				15,878.8
	$	41,176.6			$	40,823.4
Common Shares Outstanding		524.3				523.3

PACCAR Inc
CONDENSED CASH FLOW STATEMENTS
(in millions)
Six Months Ended June 30		2024				2023
OPERATING ACTIVITIES:
Net income	$	2,317.9			$	1,955.0
Depreciation and amortization:
Property, plant and equipment		204.3				205.2
Equipment on operating leases and other		262.6				239.3
Net change in trade receivables, inventory and payables		(293.8	)			(194.7	)
Net increase in wholesale receivables on new trucks		(348.2	)			(815.1	)
All other operating activities, net		(233.8	)			270.6
Net Cash Provided by Operating Activities		1,909.0				1,660.3
INVESTING ACTIVITIES:
Payments for property, plant and equipment		(411.6	)			(307.1	)
Acquisitions of equipment for operating leases		(453.0	)			(256.3	)
Net increase in financial services receivables		(668.8	)			(746.6	)
Net increase in marketable debt securities		(337.3	)			(69.1	)
Proceeds from asset disposals and other		300.9				334.4
Net Cash Used in Investing Activities		(1,569.8	)			(1,044.7	)
FINANCING ACTIVITIES:
Payments of cash dividends		(1,973.8	)			(1,236.0	)
Purchases of treasury stock		(4.0	)			(3.0	)
Proceeds from stock compensation transactions		42.3				28.8
Net increase in debt and other		356.2				1,011.6
Net Cash Used in Financing Activities		(1,579.3	)			(198.6	)
Effect of exchange rate changes on cash		(70.1	)			38.0
Net (Decrease) Increase in Cash and Cash Equivalents		(1,310.2	)			455.0
Cash and cash equivalents at beginning of period		7,181.7				4,690.9
Cash and cash equivalents at end of period	$	5,871.5			$	5,145.9

PACCAR Inc
SEGMENT AND OTHER INFORMATION
(in millions)
	Three Months Ended							Six Months Ended
	June 30							June 30
		2024			2023				2024			2023
Sales and Revenues:
Truck	$	6,577.8		$	6,827.5			$	13,118.8		$	13,241.3
Parts		1,664.3			1,598.9				3,340.2			3,221.9
Financial Services		509.8			439.8				1,019.1			863.0
Other		20.2			14.9				38.3			28.2
	$	8,772.1		$	8,881.1			$	17,516.4		$	17,354.4
Pretax Profit:
Truck	$	837.3		$	948.3			$	1,718.9		$	1,842.6
Parts		413.8			419.3				869.6			857.9
Financial Services		111.2			144.7				225.1			293.5
Investment Income and Other		98.5			56.2				181.7			(506.5	) (1)
	$	1,460.8		$	1,568.5			$	2,995.3		$	2,487.5
GEOGRAPHIC REVENUE
(in millions)
	Three Months Ended							Six Months Ended
	June 30							June 30
		2024			2023				2024			2023
United States and Canada	$	5,578.9		$	5,355.3			$	11,253.5		$	10,395.4
Europe		1,745.2			2,248.4				3,550.2			4,523.9
Other		1,448.0			1,277.4				2,712.7			2,435.1
	$	8,772.1		$	8,881.1			$	17,516.4		$	17,354.4
NEW TRUCK DELIVERIES
	Three Months Ended							Six Months Ended
	June 30							June 30
		2024			2023				2024			2023
United States and Canada		28,700			27,500				58,200			53,500
Europe		11,500			16,400				23,100			33,800
Other		8,200			8,000				15,200			15,700
		48,400			51,900				96,500			103,000

(1) Includes a $600.0 million non-recurring charge related to civil litigation in Europe (EC-related claims) in the first quarter 2023.

PACCAR Inc
SUPPLEMENTARY INFORMATION
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
This earnings release includes “adjusted net income (non-GAAP)” and “adjusted net income per diluted share (non-GAAP)”, which are financial measures that are not in accordance with U.S. generally accepted accounting principles (“GAAP”), since they exclude a charge for EC-related claims. These measures differ from the most directly comparable measures calculated in accordance with GAAP and may not be comparable to similarly titled non-GAAP financial measures used by other companies.
Adjustment for the EC-related claims relates to a pre-tax charge of $600.0 million ($446.4 million after-tax) for estimable total costs recorded in Interest and other (income) expenses, net in the first quarter 2023.
Management utilizes these non-GAAP measures to evaluate the Company’s performance and believes these measures allow investors and management to evaluate operating trends by excluding a significant non-recurring charge that is not representative of underlying operating trends.
Reconciliations from the most directly comparable GAAP measures to adjusted net income (non-GAAP) and adjusted net income per diluted share (non-GAAP) are as follows:
	Six Months Ended
($ in millions, except per share amounts)	June 30, 2023
Net income	$	1,955.0
EC-related claims, net of taxes		446.4
Adjusted net income (non-GAAP)	$	2,401.4
Per diluted share:
Net income	$	3.73
EC-related claims, net of taxes		.85
Adjusted net income (non-GAAP)	$	4.58

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20240723272261/en/

Ken Hastings

(425) 468-7530

ken.hastings@paccar.com

Source: PACCAR Inc

FAQ

What was PACCAR's (PCAR) net income for Q2 2024?

PACCAR (PCAR) reported a net income of $1.12 billion ($2.13 per diluted share) for Q2 2024.

How much were PACCAR's (PCAR) net sales and financial services revenues in Q2 2024?

PACCAR's (PCAR) net sales and financial services revenues were $8.77 billion in Q2 2024.

What was PACCAR Parts' (PCAR) revenue in Q2 2024?

PACCAR Parts (PCAR) achieved revenues of $1.66 billion in Q2 2024.

How many trucks did PACCAR (PCAR) deliver globally in Q2 2024?

PACCAR (PCAR) reported global truck deliveries of 48,400 units in Q2 2024.

What is PACCAR's (PCAR) estimated capital investment range for 2024?

PACCAR (PCAR) estimates capital investments to be in the range of $725-$775 million for 2024.