01—Abstract
Summary
Summary of the 10-K filed February 21, 2018. Cited figures are marked; the original filing is the authoritative source.
PACCAR Inc's 2017 10-K report shows a strong financial performance driven by record net sales and revenues of $19.46 billiona, a 14% increase from 2016.
The company experienced significant growth in its Truck segment, with net sales and revenues up 16% to $14.77 billionb, supported by higher truck deliveries across North America and Europe, and an increased market share in the U.S. and Canada Class 8 market. The Parts segment also achieved record sales of $3.33 billion, up 11% year-over-year, reflecting strong aftermarket demand. The Financial Services segment saw a modest revenue increase of 7% to $1.27 billion, though income before taxes declined due to factors like higher borrowing costs and losses on used lease assets.
Despite a challenging 2016 impacted by an $833 millionc European Commission charge, PACCAR demonstrated a robust recovery in 2017, achieving net income of $1.68 billion, or $4.75 per diluted share. This includes a one-time tax benefit of $173.4 million from the U.S. Tax Cuts and Jobs Act.
Excluding this benefit, adjusted net income was $1.50 billiond, or $4.26 per diluted share. The company's forward-looking outlook for 2018 is positive, anticipating increased truck industry retail sales in the U.S. and Canada and higher registrations in Europe, alongside projected growth for its Parts segment.
02—Key points
Key Highlights
- Record net sales and revenues of $19.46 billion in 2017, a 14% increase from $17.03 billion in 2016.
- Truck segment net sales and revenues increased by 16% to $14.77 billion, driven by higher truck deliveries and increased market share in key regions.
- Parts segment achieved record sales of $3.33 billion, an 11% increase, due to strong aftermarket demand.
- Net income of $1.68 billion ($4.75 per diluted share) in 2017, which includes a $173.4 million tax benefit from the Tax Cuts and Jobs Act.
- Company expects industry retail sales in the U.S. and Canada to be between 235,000 to 265,000 units in 2018, up from 218,400 in 2017.
- PACCAR Parts sales are projected to grow 5-8% in 2018.
- Significant investment in R&D and capital projects, with $433.1 million in capital investments in 2017 and planned capital investments of $425-$475 million in 2018.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-KFY2017filed February 21, 2018Financial Statements
FY2017 against FY2016
| Line item | FY2017FY2016 | Change |
|---|---|---|
| Revenue | $19.46B$17.03B | +14.2% |
| Net Income | $1.68B$521.70M | +221.1% |
| EPS (Basic) | $3.17$0.99 | +219.5% |
| EPS (Diluted) | $3.17$0.99 | +220.9% |
| Shares Outstanding (Basic) | 527.85M527 | +100227755.3% |
| Shares Outstanding (Diluted) | 529.35M528 | +100312577.7% |
05—Questions
Frequently Asked Questions
How did PACCAR perform in 2017 compared to 2016?
PACCAR demonstrated a strong rebound in 2017, with net sales and revenues increasing by 14% to $19.46 billion. This growth was primarily driven by the Truck segment, which saw a 16% revenue increase, and the Parts segment, which achieved record sales with an 11% increase. Net income significantly improved to $1.68 billion from $521.7 million in 2016, bolstered by higher sales volumes and a one-time tax benefit.
What are PACCAR's key segments and how did they perform?
PACCAR operates in three principal segments: Truck, Parts, and Financial Services. The Truck segment, accounting for 76% of revenue, saw a 16% increase in sales due to higher deliveries and market share gains. The Parts segment, 17% of revenue, achieved record sales, up 11%. The Financial Services segment, 7% of revenue, experienced a revenue increase of 7%, but income before taxes declined due to higher borrowing costs and increased losses on used lease assets.
What is the company's outlook for 2018?
PACCAR anticipates a positive year in 2018. Truck industry retail sales in the U.S. and Canada are projected to increase to between 235,000 and 265,000 units, up from 218,400 in 2017. European truck registrations are also expected to grow. PACCAR Parts sales are forecasted to increase by 5-8%, and the Financial Services segment anticipates a 2-4% growth in average earning assets. The company plans to continue investing in new truck models, technology, and expanded facilities.
How did the Tax Cuts and Jobs Act impact PACCAR's financial results?
The Tax Cuts and Jobs Act, enacted in late 2017, resulted in a one-time net tax benefit of $173.4 million for PACCAR. This benefit arose from the re-measurement of deferred tax liabilities at the new lower statutory tax rate. Consequently, PACCAR's reported net income included this significant benefit, leading to an adjusted net income that excludes it for a clearer view of operational performance.
06—Continue