PACCAR Achieves Excellent Financial Performance
Strong Global Demand for Trucks, Parts and Financial Services Drive Results
“PACCAR reported record revenues and excellent net income in the first quarter of 2023,” said Preston Feight, chief executive officer. “PACCAR’s results reflect ongoing strong demand for premium quality DAF, Peterbilt and Kenworth trucks, aftermarket parts and financial services worldwide. I am very proud of our employees and dealers who have delivered outstanding trucks and transportation solutions to our customers.”
PACCAR achieved record quarterly revenues of $8.47 billion in the first quarter of 2023, compared to the $6.47 billion reported in the same period in 2022. The company reported net income of $733.9 million ($1.40 per diluted share) in the first quarter of 2023, including a $446.4 million after-tax, non-recurring charge related to civil litigation in Europe. The civil litigation followed a 2016 settlement with the European Commission regarding an investigation of all European truck manufacturers. Excluding the non-recurring charge, the company earned adjusted net income (non-GAAP) of $1.18 billion ($2.25 per diluted share) in the first quarter of 2023. PACCAR achieved net income of $600.5 million ($1.15 per diluted share) in the first quarter last year.
Feight added, “PACCAR’s long-term investments in new truck models, advanced manufacturing and a dynamic aftermarket parts business are contributing to PACCAR’s higher operating margins. DAF, Peterbilt and Kenworth vehicles deliver premium quality and industry-leading fuel efficiency, which benefits customers’ operations. PACCAR is also investing in next generation battery electric and hydrogen powertrains, development of the PACCAR Autonomous Vehicle Platform, and enhanced PACCAR Connect telematics.”
Highlights – First Quarter 2023
Highlights of PACCAR’s financial results during the first quarter of 2023 include:
- Record consolidated revenues of $8.47 billion.
- Net income of $733.9 million.
- Adjusted net income (non-GAAP)1 of $1.18 billion, excluding the $446.4 million non-recurring charge related to civil litigation in Europe.
- Record PACCAR Parts revenue of $1.62 billion.
- Record PACCAR Parts pretax income of $438.6 million.
- PACCAR Financial Services pretax income of $148.8 million.
- Cash provided by operations of $684.8 million.
- Capital investment of $132.9 million and R&D expense of $97.2 million.
- Record stockholders’ equity of $13.88 billion.
- Manufacturing cash and marketable securities of $5.92 billion.
Strong Global Truck Markets
“Good freight markets and strong customer demand are driving the resilient truck market in North America,” said Darrin Siver, PACCAR executive vice president. “Kenworth and Peterbilt vehicles provide customers with industry-leading fuel efficiency, which enhances their operating performance and benefits the environment.” U.S. and Canada Class 8 truck industry retail sales are estimated to be in a range of 280,000-320,000 trucks in 2023.
Harald Seidel, DAF president, said, “Robust truck demand in Europe for the innovative, aerodynamic DAF XD, XF, XG and XG+ trucks is due to their best-in-class fuel efficiency and safety features, and superior driver comfort.” European truck industry registrations in the above 16-tonne market in 2023 are estimated to be in the range of 280,000-320,000 trucks.
Lance Walters, DAF Brasil president, commented, “DAF Brasil is celebrating its tenth year of operations this year. The durability and reliability of DAF’s premium above 16-tonne trucks, and strong customer demand, are driving DAF Brasil to record market share.” The South American above 16-tonne truck market is projected to be in the range of 115,000-125,000 trucks in 2023. DAF Brasil achieved a record 8.6% market share in the Brasil above 16-tonne market in the first quarter of 2023, compared to 6.9% in 2022.
PACCAR Parts Achieves Record Revenues and Profits
PACCAR Parts achieved record quarterly pre-tax income of $438.6 million, 29% higher than the $340.2 million earned in the first quarter of 2022. First quarter 2023 revenues were a record $1.62 billion compared to $1.39 billion reported in the first quarter of 2022. Laura Bloch, PACCAR vice president and PACCAR Parts general manager, said, “PACCAR Parts is accelerating its high margin business by providing strategic, technology-driven aftermarket solutions that deliver greater uptime and profitability for its customers. PACCAR Parts’ excellent performance reflects investments in its TRP all-makes parts and TRP stores, technologies such as e-commerce and managed dealer inventory, and a growing number of PACCAR trucks with PACCAR powertrains in operation.”
PACCAR Parts’ 18 global parts distribution centers support more than 2,000 DAF, Kenworth and Peterbilt dealer sales, parts and service locations, and more than 250 TRP stores. These independent, well-capitalized dealers provide an unparalleled level of service to customers, complementing the premium quality of DAF, Kenworth and Peterbilt vehicles.
PACCAR Parts Distribution Center in Louisville, Kentucky
PACCAR Financial Services Achieves Excellent Quarterly Profits
PACCAR Financial Services (PFS) achieved strong pretax income of $148.8 million in the first quarter of 2023, compared to $147.0 million earned in the first quarter of 2022. First quarter 2023 revenues were $423.2 million compared to $366.2 million in the same quarter of 2022. “PFS achieved excellent results due to the high quality of its growing portfolio, and very good used truck performance. PFS is leveraging investments in its 13 worldwide used truck centers to sell an increased number of used trucks at higher retail prices,” said Todd Hubbard, PACCAR vice president. Kenworth and Peterbilt truck resale values command a 10-20% premium over competitors’ trucks.
PFS has a portfolio of 220,000 trucks and trailers, with total assets of $17.91 billion. PacLease, a major full-service truck leasing company in North America and Europe with a fleet of over 41,000 vehicles, is included in this segment. “PACCAR’s strong 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, issuing $800 million in medium-term notes during the first quarter of 2023.”
Capital and R&D Investments in Products, Technologies and Facilities
PACCAR’s consistent long-term profits, strong balance sheet, and focus on quality, technology and innovation have enabled the company to invest $7.4 billion in world-class facilities, next generation products and state of the art technologies during the past decade. PACCAR invested $132.9 million in capital projects and $97.2 million in research and development expenses in the first quarter of 2023. Harrie Schippers, president and chief financial officer, said, “Capital expenditures are projected to be in the range of $600-$650 million and research and development expenses are estimated to be in the range $380-$420 million in 2023. PACCAR is increasing its investment in next generation clean diesel and electric powertrain technologies, autonomous driving systems, connected vehicle services, advanced manufacturing and distribution capabilities.”
DAF is expanding its production facilities in Eindhoven with a new electric truck assembly factory to meet increasing customer demand. DAF XD and XF Electric trucks provide a range of over 300 miles, enabling customers to use zero emissions transport solutions in several applications, including regional haul, local distribution and refuse.
DAF Electric Truck Factory, Eindhoven, Netherlands
PACCAR Announces Investment in Platform Science
PACCAR announced last month that it made a minority equity investment in its connected truck partner, Platform Science. The strategic investment complements the two companies’ partnership, which will integrate Platform Science’s Virtual Vehicle technology with the PACCAR Connect telematics system.
John Rich, PACCAR chief technology officer, said, “PACCAR is pleased to deepen our strategic relationship by investing in Platform Science. PACCAR Connect will provide the industry with a user-friendly, customizable and productive connected truck solution, enhancing operations for customers and increasing recurring digital services revenue for PACCAR. We look forward to launching the system on Kenworth and Peterbilt trucks in 2024.”
PACCAR is a global technology leader in the design, manufacture and customer support of high-quality light-, medium- and heavy-duty trucks under the Kenworth, Peterbilt and DAF nameplates. PACCAR also designs and manufactures advanced powertrains, provides financial services and information technology, and distributes truck parts related to its principal business.
PACCAR will hold a conference call with securities analysts to discuss first quarter earnings on April 25, 2023, at 8:00 a.m. Pacific time. Interested parties may listen to the call by selecting “Q1 Earnings Webcast” at PACCAR’s homepage. The webcast will be available on a recorded basis through May 2, 2023. PACCAR shares are traded 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.