10-KPeriod: FY2021

PACCAR INC Annual Report, Year Ended Dec 31, 2021

Filed February 23, 2022For Securities:PCAR

Summary

PACCAR Inc's 2021 10-K filing highlights a robust financial performance, driven by significant increases in truck and parts revenues, alongside strong profitability across its segments. The company reported record parts sales and a substantial rise in net income, demonstrating resilience and effective operational management in a dynamic market environment. PACCAR successfully navigated supply chain challenges, including the ongoing semiconductor shortage, by adjusting build rates and increasing average truck prices. The company is strategically investing in future growth, particularly in clean diesel and zero-emission powertrain technologies, autonomous systems, and connected vehicle services. PACCAR's financial services segment also showed strong performance with record income, supported by robust used truck sales and a conservative approach to credit risk. Looking ahead, PACCAR anticipates stable heavy-duty truck market demand in North America and Europe for 2022, though it acknowledges continued impact from the semiconductor shortage. The company remains focused on innovation, operational efficiency, and shareholder returns, as evidenced by its consistent dividend payments.

Financial Highlights

34 data points
Beta

Revenue

$23.52B

Net Income

$1.87B

7.9% Net Margin

EPS (Diluted)

$3.57

Total Assets

$29.51B

Free Cash Flow

$1.63B

Financial Statements
Beta
Revenue$23.52B
Net Income$1.87B
EPS (Basic)$3.58
EPS (Diluted)$3.57
Shares Outstanding (Basic)521.70M
Shares Outstanding (Diluted)522.70M

Key Highlights

  • 1Record-breaking Parts segment sales reaching $4.94 billion, a 26% increase year-over-year, reflecting strong aftermarket demand.
  • 2Consolidated net sales and revenues increased by 26% to $23.52 billion in 2021, up from $18.73 billion in 2020, primarily due to higher truck and parts revenues.
  • 3Net income grew by 42% to $1.85 billion ($5.32 per diluted share) in 2021, compared to $1.30 billion ($3.74 per diluted share) in 2020, marking the 83rd consecutive year of profitability.
  • 4The Truck segment saw a 28% increase in net sales to $16.80 billion, driven by higher unit deliveries across all major markets and increased average truck prices.
  • 5The Financial Services segment achieved record income of $437.6 million, a 96% increase from 2020, bolstered by improved used truck results and a lower provision for credit losses.
  • 6PACCAR is significantly increasing R&D investment to $350-400 million in 2022, focusing on clean diesel, zero-emission powertrains (electric, hydrogen), autonomous systems, and connected vehicle services.
  • 7The company maintained strong liquidity with total cash and marketable securities of $4.99 billion at year-end 2021.

Frequently Asked Questions

PACCAR operates in three principal segments: Trucks, Parts, and Financial Services. In 2021, the Truck segment was the largest contributor, accounting for 71% of net sales and revenues ($16.80 billion), driven by increased truck deliveries and higher average sales prices. The Parts segment (21% of revenue) achieved record sales of $4.94 billion due to strong aftermarket demand. The Financial Services segment (7% of revenue) generated $1.69 billion in revenue, with record income driven by improved used truck sales and lower credit loss provisions.

PACCAR faces several key risks, including the cyclical nature of the commercial truck market, which is sensitive to economic conditions. Competition and pricing pressures are significant. Production costs are subject to variability in material and commodity prices, inflation, and potential component shortages, such as the ongoing semiconductor supply shortage impacting deliveries. The Financial Services segment is exposed to credit risk and interest-rate fluctuations. Additionally, the company operates globally and is subject to political, regulatory, and economic risks in various jurisdictions, as well as the ongoing impact of the COVID-19 pandemic.

PACCAR is significantly increasing its investment in research and development, with projections of $350-400 million for 2022. Key areas of investment include clean diesel and zero-emission powertrain technologies (battery electric, hydrogen fuel cell, hydrogen combustion), autonomous driving systems, connected vehicle services, and next-generation manufacturing and distribution capabilities. The company is actively producing battery electric vehicle models and has ongoing development projects for advanced powertrains.

PACCAR acknowledges the industry-wide semiconductor chip shortage has impacted its ability to deliver products in 2021 and anticipates it will continue to affect deliveries in 2022. The company is managing this by adjusting build rates and increasing average truck sales prices to offset some of the cost pressures and ensure product availability where possible. Long-term supply agreements with key component manufacturers are in place to help mitigate supply continuity risks.