Paccar Reports Strong Q4 Revenue, Income
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Paccar Inc. beat market expectations for fourth-quarter earnings Jan. 24, aided by strong demand for its trucks from customers looking to replace older, outdated vehicles.
The Bellevue, Wash., company said it had $921.3 million in net income, or $2.64 per share, in the last three months of 2022, 78% higher than the $518.7 million, $1.49, in the same period a year ago.
Revenue reached $8.13 billion in Q4 compared with $6.69 billion in 2021.
Paccar’s performance on income and revenue easily beat the expectations of analysts surveyed by investment site Seeking Alpha. They were expecting a price per share of $2.20 and revenue of $7.16 billion.
For the year, Paccar had revenue of $28.82 billion compared with $23.52 billion in 2021. The company earned $3.01 billion, $8.63 per diluted share, compared with $1.87 billion, $5.35, in the year-earlier period.
“Paccar’s excellent results reflect the strong demand for premium quality DAF, Peterbilt and Kenworth new truck models worldwide, record aftermarket parts profits and strong financial services performance,” CEO Preston Feight said. “I am very proud of our employees and dealers who have delivered outstanding trucks and transportation solutions to our customers.”
Paccar said 2022 marked its 84th consecutive year of net income, and the company delivered 185,900 vehicles worldwide. That includes the new-generation DAF XD distribution and vocational truck, which company officials said earned the International Truck of the Year 2023 award.
Class 8 truck industry retail sales in the U.S. and Canada were 283,500 units in 2022, the company said, and in 2023 sales are expected to be in a range of 270,000-310,000. It is forecasting a similar industry number for Europe this year.
“Since 2020, the industry has really been not able to supply all the trucks that have been needed. So, there is a strong pent-up demand for the trucks,” Feight said. “And in addition to that, obviously, we’ve launched more new products than any time in our history. So that’s contributing.
“We have excellent visibility looking into the year, full through the first half, filling the third quarter nicely. Demand continues to be strong, in line with build. And so, it’s looking like a really good year.”
The new-generation DAF XD distribution and vocational truck has earned international honors, according to the company. (Paccar Inc.)
The company said rising e-commerce deliveries and a focus on the industry’s growing logistics networks are driving demand for longhaul trucks.
“Good freight markets and an increased fleet age are driving strong demand for fuel-efficient Kenworth and Peterbilt trucks,” Feight said.
Kenworth and Peterbilt achieved market share of 29.8% in 2022 compared with 29.2% in 2021.
That market share figure trailed only Daimler Truck North America, which will report its Q4 and 2022 results in February.
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Executive Vice President Darrin Siver said. “The new Kenworth T680 and Peterbilt 579 vehicles provide customers with up to 7% increased fuel efficiency, which enhances their operating performance and benefits the environment.”
Paccar said it also invested $846.2 million in 2014 in capital projects and research and development, including battery-electric trucks, hydrogen internal combustion and fuel cell powertrains, as well as its enhanced Paccar Connect telematics solutions.
“We think that the EV market, the zero-emission vehicle market, will just gradually grow. Customers are experimenting with it now, trying to understand it,” Feight said. “They’re buying chargers, putting in infrastructure around it. Paccar has nine electric vehicle models in production. Nine. So, our teams have done a fantastic job of putting the products out there for customers to get used to and applications that fit all their needs.”
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While the company reported strong numbers in its truck sales division, it also produced healthy results in its parts and financial services segments, although financing did decline year-over-year.
The truck sales unit showed fourth-quarter revenue of $6.25 billion compared with $4.96 billion in the year-earlier period. Truck revenue for 2022 reached nearly $21.5 billion compared with $16.8 billion year-over-year.
Fourth-quarter parts revenue was nearly $1.47 billion compared with $1.31 billion in 2021. Full-year revenue reached $5.76 billion compared with $4.94 billion.
The financial services division saw revenue increase to $394.8 million compared with $390.4 million. For the full year, it reached $1.5 billion, down from $1.68 billion.
“Paccar has generated excellent shareholder returns and annual net income due to its industry-leading, premium-quality vehicles, strong growth of its aftermarket parts and financial services, and innovative use of technology,” Executive Chairman Mark Pigott said.