PACCAR Rebounds as Truck Profit More Than Doubles
Revenue reached $7.55 billion, rising 11.4% from the preceding quarter.
PACCAR (PCAR), the truck maker, rebounded in the second quarter as net income climbed 24.2% sequentially to $752.0 million and rose 3.9% from a year earlier.
The results marked a turn from the 2024 downturn. Revenue had fallen from $7.51 billion in the year-earlier quarter to $6.67 billion in the third quarter before recovering, while net income followed a similar path and surpassed its year-earlier level in the latest period.
Revenue rose 0.5% from a year earlier and diluted earnings increased to $1.43 a share from $1.37. For the first half, revenue declined 4.2% to $14.32 billion. Reported net income rose 10.5% because the prior-year period included a $264.5 million after-tax litigation charge; against adjusted year-earlier earnings, first-half net income was about 9% lower.
Truck deliveries increased 16.9% from the first quarter to 38,700, though they remained 1.5% below the year-earlier period. Truck revenue rose 16.1% sequentially to $5.25 billion, while pretax profit more than doubled to $360.5 million and the pretax margin widened to about 6.9% from 3.9%.
A stronger European business helped offset weaker North American volume. Revenue from the U.S. and Canada declined 3.3% to $4.59 billion, while European revenue increased 6.9% to $1.79 billion. European truck deliveries rose 5.7%, compared with declines of 4.3% in North America and 3.5% in other markets.
PACCAR Parts revenue reached a record $1.75 billion, up 1.5% from a year earlier, though its pretax margin narrowed to about 23.9% from 24.2%. Financial Services pretax income increased 0.7% to $124.1 million as revenue edged 0.4% higher and finance margins remained steady.
PACCAR now expects the European market for trucks above 16 tonnes to total 290,000 to 330,000 vehicles in 2026, raising both ends of its forecast by 10,000. It maintained its U.S.-Canada Class 8 forecast of 230,000 to 270,000 vehicles and its South American outlook of 100,000 to 110,000.
The earnings recovery came with weaker cash generation. Operating cash flow fell 15.9% from a year earlier to $700.8 million, while capital investment declined 38.8% to $138.7 million and research-and-development spending held roughly steady at $114.3 million.