Paccar Q2 Results Ride Surge in Truck Deliveries, Parts, Financial Services
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Paccar Inc. reported second-quarter earnings and revenue soared compared with a year earlier amid improved truck deliveries, and record performance at its parts and financial service segments.
For the period ended June 30, net income was $492.9 million, or $1.41 per diluted share, on revenue of $5.3 billion. That compared with net income of $147.7 million, 43 cents, on revenue of $2.7 billion in the 2020 period.
“Paccar Parts achieved record quarterly sales and profits due to strong industry truck utilization, an increased number of Kenworth, Peterbilt and DAF trucks with the Paccar Powertrain and the growth of Paccar Parts’ e-commerce platform,” CEO Preston Feight said during an earnings call . “Paccar Financial Services earned record quarterly profits due to excellent portfolio quality and strong used truck demand.”
Feight
Matt Elkott, a financial analyst at Cowen Inc., wrote in a note, “[Paccar] overcame tempered Class 8 builds to deliver a slight earnings per share beat, driven by a banner performance at the Financial Services segment.”
Paccar manufactures the Kenworth Truck Co., Peterbilt Motors Co. and DAF brands. It delivered a total of 40,100 trucks in the second quarter (22,600 in the U.S. and Canada) compared with 18,100 a year earlier, with an additional 6,500 trucks awaiting components at quarter-end due to supply chain issues.
The company forecast Class 8 industry retail sales in the U.S. and Canada to be in a range of 260,000 to 280,000 trucks this year. Kenworth and Peterbilt’s Class 8 retail sales market share is 29.4% year-to-date.
Dozier
“Freight tonnage, industry truck utilization and customer demand for new trucks are strong,” Paccar Senior Vice President Mike Dozier said.
At the same time, the truck markets are tempered by the industrywide undersupply of semiconductor chips, the Bellevue, Wash.-based company noted.
Meanwhile, Paccar Parts earned record quarterly pretax income of $265.6 million compared with $151.9 million a year earlier. It also posted record second-quarter revenue of $1.21 billion, compared with the $823.7 million reported in the same period last year.
Paccar Parts has 18 parts distribution centers to support 2,200 DAF, Kenworth and Peterbilt dealer sales, parts and service locations globally, according to the company.
Paccar also reported it plans to open a 260,000-square-foot center in Louisville, Ky., next year to further enhance parts availability.
Paccar Financials q2 2021 by Transport Topics on Scribd
The Financial Services segment earned record pretax income of $106.5 million compared with $55.5 million in the second quarter of 2020. Revenue rose to $456.3 million compared with $360.3 million a year earlier.
The financing segment has a portfolio of 205,000 trucks and trailers, with total assets of $15.57 billion. That includes PacLease, a major full-service truck leasing company in North America, Europe and Australia with a fleet of 38,000 vehicles.
“The industrywide undersupply of semiconductors has contributed to increased demand for premium Paccar used trucks,” PacLease President Ken Roemer said.
Meanwhile, in the quarter, the company stepped up its research and development activities, spending $84.4 million compared with $66.5 million in the 2020 period.
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Among the quarterly highlights:
• The next-generation Peterbilt 579 and Kenworth T680 began production in May. These new trucks feature enhanced aerodynamics and powertrains that deliver up to 7% higher fuel efficiency.
• In June, DAF launched the XF, XG and XG+, with Feight calling them “game changing.”
“DAF is the first manufacturer to utilize the new European regulations allowing for a longer cab, and the regulations enabled DAF’s engineers to design an aerodynamically optimized truck that provides up to 10% greater fuel efficiency and an equal reduction in greenhouse gas emissions,” he said.
Production of the DAF trucks begins in October.
• During the second quarter, Paccar enhanced its autonomous truck development partnership with Aurora by becoming a minority investor in their planned public offering. The Paccar-Aurora partnership continues to make progress in developing a Level 4 autonomous solution.
• Peterbilt, Kenworth and DAF began production of battery-electric trucks in the second quarter. Paccar has received customer orders for more than 450 zero emissions vehicles and has 60 in the hands of customers in Europe and North America.
“Paccar invests to grow its business with new aerodynamic truck models, diesel and zero-emission powertrain technologies, advanced driver assistance systems, connected vehicle services, next-generation manufacturing and distribution capabilities,” Dozier said. “The new DAF trucks and factory expansion in Eindhoven, Netherlands, and Westerlo, Belgium, represent a $1 billion investment.”
Capital investments are estimated to be in a range of $550 million to $600 million, and research and development expenses to be in a range of $340 million to $360 million, this year, Paccar reported.
“These are really exciting times for Paccar,” Feight said, “as we create our future.”
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