Increased Truck
Deliveries and Strong Parts Performance Drive
Results
“PACCAR achieved record revenues and net income in the second
quarter of 2023 due to increased truck deliveries, excellent gross
margins and strong PACCAR Parts results,” said Preston Feight,
chief executive officer. “PACCAR Parts achieved robust quarterly
sales and profits due to industry-leading logistics performance
that enhanced customer uptime. PACCAR Financial Services delivered
excellent profitability due to its high quality portfolio and good
used truck results. PACCAR is pioneering new technologies such as
predictive data analytics in its aftermarket and powertrain
businesses. I am very proud of our employees for delivering premium
trucks and transportation solutions to our customers.”
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the full release here:
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Peterbilt, DAF and Kenworth Heavy- and
Medium Duty Truck Range (Photo: Business Wire)
PACCAR earned record net income of $1.22 billion ($2.33 per
diluted share) in the second quarter, an increase of 70% compared
to $720.4 million ($1.37 per diluted share) earned in the same
period last year. Second quarter net sales and financial services
revenues were $8.88 billion, 24% higher than the $7.16 billion
achieved in the second quarter of 2022. PACCAR achieved Truck,
Parts and Other gross margins of 18.8% compared to 14.4% in the
same period last year.
PACCAR reported first half net income of $1.96 billion ($3.73
per diluted share), including a $446.4 million after-tax,
non-recurring charge related to civil litigation in Europe,
compared to $1.32 billion ($2.52 per diluted share), earned in same
period last year. 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 2023 were $17.35
billion, compared to $13.63 billion achieved last year.
PACCAR Increases Quarterly Dividend
PACCAR’s Board of Directors this month approved an increase of
8% in the regular quarterly cash dividend from twenty-five cents
($.25) per share to twenty-seven cents ($.27) per share. The
dividend will be payable on September 7, 2023, to stockholders of
record at the close of business on August 17, 2023.
Financial Highlights – Second Quarter 2023
Highlights of PACCAR’s financial results for the second quarter
of 2023 include:
- Record net sales and revenues of $8.88 billion.
- Record net income of $1.22 billion.
- Global truck deliveries of 51,900 units.
- PACCAR Parts revenues of $1.60 billion.
- PACCAR Parts pretax income of $419.3 million.
- PACCAR Financial Services pretax income of $144.7 million.
- Capital investments of $179.1 million and R&D expenses of
$101.3 million.
- Manufacturing cash and marketable securities of $6.62
billion.
- Cash generated from operations of $975.5 million.
- Stockholders’ equity of $15.08 billion.
Financial Highlights – First Half 2023
Highlights of PACCAR’s financial results for the first six
months of 2023 include:
- Net sales and revenues of $17.35 billion.
- Net income of $1.96 billion.
- Adjusted net income (non-GAAP)1 of $2.40 billion, excluding the
$446.4 million non-recurring charge related to civil litigation in
Europe.
- Capital investments of $312.0 million and R&D expenses of
$198.5 million.
- PACCAR Parts pretax income of $857.9 million.
- PACCAR Financial Services pretax income of $293.5 million.
- Cash generated from operations of $1.66 billion.
- Medium-term note issuances of $1.48 billion.
Global Truck Markets
“Customers are updating their fleets to take advantage of
Peterbilt and Kenworth’s industry-leading fuel efficiency and
reliability. Our factory production schedules are full for the
year,” commented Darrin Siver, PACCAR executive vice president.
Class 8 industry retail sales in the U.S. and Canada are estimated
to be in a range of 290,000-320,000 trucks this year.
“DAF’s innovative range of premium new trucks are generating
excellent results for our customers,” shared Harald Seidel, DAF
president. “The new, aerodynamic DAF trucks are delivering the
highest fuel efficiency in the industry, which reduces customers’
fuel expenses by several thousand dollars per truck per year and is
good for the environment. The DAF XF has been honored as Green
Truck 2023 in Germany by the leading German trade magazines, for
its industry-leading transport efficiency and fuel performance.”
European truck industry registrations in the above 16-tonne segment
are estimated to be in a range of 300,000-330,000 vehicles this
year.
Mike Dozier, PACCAR executive vice president, said, “Kenworth
and DAF trucks are increasing their market share in the South
American market.” The South American above 16-tonne truck market is
estimated to be in the range of 105,000-115,000 units this year.
DAF Brasil’s market share was 9.2% in the above 16-tonne truck
segment in the first six months of this year compared to 6.9% in
the same period last year.
PACCAR Parts Achieves Strong Quarterly Revenues and
Profits
PACCAR Parts earned strong quarterly pretax income of $419.3
million in the second quarter of 2023, 19% higher than the $353.3
million earned in the same period last year. PACCAR Parts achieved
quarterly revenues of $1.60 billion in the second quarter, 11%
higher than the $1.43 billion reported in the same period last
year. PACCAR Parts first half 2023 revenues were $3.22 billion,
compared to $2.82 billion in the same period last year. PACCAR
Parts achieved pretax profit of $857.9 million in the first six
months of 2023, compared to $693.5 million earned in the first six
months of 2022.
Laura Bloch, PACCAR vice president and PACCAR Parts general
manager, said, “PACCAR Parts provides strategic, technology-driven
transportation solutions that deliver greater uptime and
profitability for customers. PACCAR Parts’ Managed Dealer Inventory
program deploys predictive data analytics to recommend the optimal
mix of truck parts for dealers’ inventory each month.”
PACCAR Parts’ 18 global parts distribution centers (PDCs)
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 excellent service to
customers, complementing the premium quality of DAF, Kenworth and
Peterbilt vehicles.
A new, 240,000 square-foot PACCAR PDC will be opened in
Massbach, Germany, in 2024, improving parts delivery to dealers and
customers in the region. PACCAR Parts’ 18 worldwide PDCs total 3.3
million square feet.
Financial Services Companies Achieve Excellent
Results
PACCAR Financial Services (PFS) earned pretax income of $144.7
million in the second quarter this year compared to $144.4 million
in the second quarter of 2022. PFS achieved second quarter 2023
revenues of $439.8 million compared to $372.5 million in the same
period last year. For the first six months of 2023, PFS earned
pretax income of $293.5 million compared to $291.4 million last
year. First half 2023 revenues were $863.0 million compared with
$738.7 million for the same period a year ago. Todd Hubbard, vice
president, said, “PFS achieved excellent second quarter results due
to its high quality portfolio and good used truck profitability.
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 224,000 trucks and trailers, with total
assets of $19.04 billion. PacLease, a major full-service truck
leasing company in North America, Europe and Australia with a fleet
of 42,000 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, and issued $1.48 billion of medium-term notes during
the first half of 2023.
PACCAR and Toyota Expand Hydrogen Fuel Cell Truck
Collaboration
PACCAR and Toyota have expanded joint efforts to develop and
produce zero emissions, hydrogen fuel cell Kenworth and Peterbilt
trucks powered by Toyota’s next-generation hydrogen fuel cell
modules. The updated agreement supports ongoing development and
commercialization of zero-emission versions of the Kenworth T680
and Peterbilt 579 models featuring Toyota’s hydrogen fuel cell
powertrain. Initial customer deliveries are planned for 2024.
John Rich, PACCAR chief technology officer, commented, “This
partnership further expands PACCAR’s industry-leading lineup of
zero emissions vehicles that enhance customers’ operational
efficiency and reduce their environmental impact.”
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 $7.5 billion in new and expanded
facilities, innovative products and new technologies during the
past decade. Capital investments are estimated to be in a range of
$625-$675 million, and research and development expenses to be in a
range of $400-$430 million, this year. “PACCAR is increasing its
investment in fuel efficient diesel and electric powertrain
technologies, autonomous systems, connected vehicle services, and
next-generation manufacturing and parts distribution capabilities,”
said Harrie Schippers, president and chief financial officer.
Kenworth expanded its Chillicothe, Ohio truck factory in the
second quarter by 105,000 square feet. The $47 million expansion
enhances operational efficiency by installing new state-of-the-art
dynamometers, and brake system and axle alignment testing
equipment.
PACCAR will hold a conference call with securities analysts to
discuss second quarter earnings on July 25, 2023, 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 August 1, 2023.
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.
1 See attached supplementary information on non-GAAP financial
measures.
PACCAR Inc SUMMARY STATEMENTS OF OPERATIONS (in
millions except per share amounts)
Three Months Ended
Six Months Ended
June 30
June 30
2023
2022
2023
2022
Truck, Parts and Other: Net sales and revenues
$
8,441.3
$
6,786.2
$
16,491.4
$
12,892.6
Cost of sales and revenues
6,851.7
5,811.0
13,344.8
11,096.5
Research and development
101.3
80.4
198.5
158.4
Selling, general and administrative
144.9
144.9
304.7
292.9
Interest and other (income) expense, net
(17.7
)
(22.4
)
561.1
(1
)
(54.4
)
Truck, Parts and Other Income BeforeIncome Taxes
1,361.1
772.3
2,082.3
1,399.2
Financial Services: Revenues
439.8
372.5
863.0
738.7
Interest and other
253.3
191.8
489.4
375.1
Selling, general and administrative
37.0
31.9
72.2
67.6
Provision for losses on receivables
4.8
4.4
7.9
4.6
Financial Services Income Before Income Taxes
144.7
144.4
293.5
291.4
Investment income
62.7
5.4
111.7
2.9
Total Income Before Income Taxes
1,568.5
922.1
2,487.5
1,693.5
Income taxes
347.4
201.7
532.5
372.6
Net Income
$
1,221.1
$
720.4
$
1,955.0
$
1,320.9
Net Income Per Share: Basic
$
2.33
$
1.38
$
3.73
$
2.53
Diluted
$
2.33
$
1.37
$
3.73
$
2.52
Weighted Average Shares Outstanding: Basic
523.8
522.6
523.6
522.5
Diluted
524.8
523.2
524.6
523.2
Dividends declared per share
$
.25
$
.23
$
.50
$
.46
(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
2023
2022
ASSETS Truck, Parts and Other: Cash and marketable
securities
$
6,618.4
$
6,158.9
Trade and other receivables, net
2,350.9
1,919.8
Inventories, net
2,712.9
2,198.8
Property, plant and equipment, net
3,601.8
3,468.4
Equipment on operating leases and other, net
2,543.1
2,350.0
Financial Services Assets
19,040.6
17,179.6
$
36,867.7
$
33,275.5
LIABILITIES AND STOCKHOLDERS' EQUITY Truck, Parts
and Other: Accounts payable, deferred revenues and other
$
7,484.2
$
7,185.6
Financial Services Liabilities
14,304.2
12,922.8
STOCKHOLDERS' EQUITY
15,079.3
13,167.1
$
36,867.7
$
33,275.5
Common Shares Outstanding
522.8
522.0
PACCAR Inc CONDENSED CASH FLOW STATEMENTS (in
millions) Six Months Ended June 30
2023
2022
OPERATING ACTIVITIES: Net income
$
1,955.0
$
1,320.9
Depreciation and amortization: Property, plant and equipment
205.2
155.3
Equipment on operating leases and other
239.3
227.3
Net change in trade receivables, inventory and payables
(194.7
)
62.3
Net increase in wholesale receivables on new trucks
(815.1
)
(570.4
)
All other operating activities, net
270.6
(97.9
)
Net Cash Provided by Operating Activities
1,660.3
1,097.5
INVESTING ACTIVITIES: Payments for property, plant
and equipment
(307.1
)
(266.9
)
Acquisitions of equipment for operating leases
(256.3
)
(472.4
)
Net increase in financial services receivables
(746.6
)
(425.1
)
Net increase in marketable debt securities
(69.1
)
(89.6
)
Proceeds from asset disposals and other
334.4
375.0
Net Cash Used in Investing Activities
(1,044.7
)
(879.0
)
FINANCING ACTIVITIES: Payments of cash dividends
(1,236.0
)
(757.6
)
Purchases of treasury stock
(3.0
)
(1.9
)
Proceeds from stock compensation transactions
28.8
18.4
Net increase in debt and other
1,011.6
395.1
Net Cash Used in Financing Activities
(198.6
)
(346.0
)
Effect of exchange rate changes on cash
38.0
(69.5
)
Net Increase (Decrease) in Cash and Cash Equivalents
455.0
(197.0
)
Cash and cash equivalents at beginning of period
4,690.9
3,428.3
Cash and cash equivalents at end of period
$
5,145.9
$
3,231.3
PACCAR Inc SEGMENT AND OTHER INFORMATION (in
millions) Three Months Ended Six Months Ended June 30 June
30
2023
2022
2023
2022
Sales and Revenues: Truck
$
6,827.5
$
5,336.4
$
13,241.3
$
10,033.5
Parts
1,598.9
1,434.7
3,221.9
2,823.6
Financial Services
439.8
372.5
863.0
738.7
Other
14.9
15.1
28.2
35.5
$
8,881.1
$
7,158.7
$
17,354.4
$
13,631.3
Pretax Profit: Truck
$
948.3
$
422.1
$
1,842.6
$
698.8
Parts
419.3
353.3
857.9
693.5
Financial Services
144.7
144.4
293.5
291.4
Investment Income and Other
56.2
2.3
(506.5
)
(1
)
9.8
$
1,568.5
$
922.1
$
2,487.5
$
1,693.5
GEOGRAPHIC REVENUE (in millions) Three Months
Ended Six Months Ended June 30 June 30
2023
2022
2023
2022
United States and Canada
$
5,355.3
$
4,381.1
$
10,395.4
$
8,142.5
Europe
2,248.4
1,783.3
4,523.9
3,656.6
Other
1,277.4
994.3
2,435.1
1,832.2
$
8,881.1
$
7,158.7
$
17,354.4
$
13,631.3
NEW TRUCK DELIVERIES Three Months Ended Six
Months Ended June 30 June 30
2023
2022
2023
2022
United States and Canada
27,500
24,400
53,500
45,100
Europe
16,400
15,400
33,800
31,500
Other
8,000
7,100
15,700
13,300
51,900
46,900
103,000
89,900
(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 ($446.4 million after-tax) for estimable total
costs recorded in Interest and other expenses (income), net in the
first quarter 2023.
Management utilizes these non-GAAP measures to evaluate the
Company’s performance and believes these measures allow investors
and management to evaluate operating trends by excluding a
significant non-recurring charge that is not representative of
underlying operating trends.
Reconciliations from the most directly comparable GAAP measures
to adjusted net income (non-GAAP) and adjusted net income per
diluted share (non-GAAP) are as follows:
Six Months Ended
($ 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/20230725773572/en/
Ken Hastings (425) 468-7530 ken.hastings@paccar.com
PACCAR (NASDAQ:PCAR)
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