Truck manufacturer Paccar knocks Q1 financials out of the park

Paccar Inc. posted record Q1 sales and earnings, increasing production despite stubborn supply chain disruptions. The company reaped benefits from a practically all-new lineup of medium- and heavy-duty trucks introduced over the last year.

“Paccar’s investments in vehicle, powertrain and technology initiatives are delivering increased profitability,” CEO Preston Feight said in a press release.

First-quarter 2022 sales increased to $6.47 billion compared to $5.85 billion in the first quarter of 2021. Net income of $600.5 million, or $1.72 per diluted share, was up 28% compared to $470.8 million, or $1.35, in the same period last year.

In addition to sales and profits, Paccar (NASDAQ: PCAR) achieved a gross margin of 13.4%. It put up other big numbers including:

• Parts revenues of $1.39 billion and record parts pretax profits of $340.2 million, up 35% over a year ago.
• Record financial services pretax profits of $147.0 million, up 92% from a year ago.
• Cash flow from operations of $459.3 million.

Parts revenue benefits from lengthened trade-in cycles

The dearth of new truck deliveries across the industry because of a persistent semiconductor shortage and other supply issues prompts fleets to keep current equipment in service beyond normal trade-in cycles. That, in turn, increases the need for replacement parts.”

“Customers’ increased truck utilization and higher average fleet age contributed to Paccar Parts’ record results,” said Laura Bloch, general manager of Paccar Parts.

Paccar appears at least somewhat upbeat on Class 8 production, forecasting an industry build of 260,000 to 290,000 trucks this year.  

“U.S. economic and industrial production growth are projected to be good this year,” said Harrie Schippers, Paccar president and chief financial officer. “The new Kenworth T680 and Peterbilt 579 trucks are delivering the highest fuel efficiency in the industry, which is appealing to our customers faced with increased energy costs.” 

The new Class 8 models are 7% more fuel efficient than the models they replaced. The trucks are the most aerodynamic in company history, allowing them to move with less wind interference. In global markets, Paccar’s new XF, XG and XG+  from DAF Trucks are 10% more fuel efficient than previous models.

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Labor Department sues Paccar over firing of worker who publicly questioned COVID safety 

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