10-QPeriod: Q1 FY2019

PACCAR INC Quarterly Report for Q1 Ended Mar 31, 2019

Filed May 2, 2019For Securities:PCAR

Summary

PACCAR Inc reported strong first-quarter 2019 results, demonstrating significant year-over-year growth across its core segments. Net sales and revenues reached a record $6.49 billion, up 15% from $5.65 billion in the prior year, driven by robust performance in the Truck, Parts, and Financial Services divisions. Net income also saw a substantial increase, reaching a record $629 million, or $1.81 per diluted share, compared to $512 million, or $1.45 per diluted share, in Q1 2018. The company's Truck segment experienced record sales due to higher truck deliveries, particularly in North America and Europe. The Parts segment also delivered record sales, reflecting strong aftermarket demand. PACCAR Financial Services contributed with record revenues, supported by increased earning assets and higher yields. The company is also making strategic investments in R&D and capital expenditures to support long-term growth, including advancements in alternative powertrain technologies and expansion of its parts distribution network.

Financial Highlights

31 data points
Beta

Revenue

$6.49B

Net Income

$629.00M

9.7% Net Margin

EPS (Diluted)

$1.21

Total Assets

$26.16B

Cash & Equivalents

$2.84B

Free Cash Flow

$260.20M

Financial Statements
Beta
Revenue$6.49B
Net Income$629.00M
EPS (Basic)$1.21
EPS (Diluted)$1.21
Shares Outstanding (Basic)520.80M
Shares Outstanding (Diluted)521.70M

Key Highlights

  • 1Record net sales and revenues of $6.49 billion in Q1 2019, a 15% increase year-over-year.
  • 2Net income rose to a record $629 million ($1.81 per diluted share) in Q1 2019, up from $512 million ($1.45 per diluted share) in Q1 2018.
  • 3Truck segment sales increased by 17% to $5.11 billion, driven by higher truck deliveries in key regions.
  • 4Parts segment sales grew by 7% to $1.00 billion, reflecting strong aftermarket demand.
  • 5Financial Services revenues increased by 5% to $349.5 million, supported by growth in earning assets and higher yields.
  • 6Capital investments for 2019 are projected to be between $625 million and $675 million, with R&D expenses expected to be between $320 million and $340 million.
  • 7The company is actively investing in new truck models, zero-emission technologies, and expanded manufacturing and distribution facilities.

Frequently Asked Questions

The significant increase in net income was primarily driven by higher revenues across all three reportable segments: Truck, Parts, and Financial Services, coupled with improved operating results within these segments. Higher truck deliveries and stronger aftermarket parts demand, along with increased earning assets and yields in Financial Services, contributed to the overall profitability.

PACCAR is actively investing in and field-testing advanced truck technologies, including battery electric, hydrogen fuel cell, and hybrid powertrains. These efforts are aimed at supporting environmental leadership and developing innovative alternative powertrain solutions for future truck models.

For 2019, PACCAR anticipates U.S. and Canada heavy-duty truck retail sales between 295,000-315,000 units. In Europe, registrations for over 16-tonne vehicles are expected to be between 290,000-320,000 units. South America heavy-duty truck registrations are estimated to increase to 105,000-115,000 units. PACCAR Parts sales are projected to grow by 5-8% compared to 2018.

PACCAR Financial Services (PFS) reported record total assets of $14.91 billion, supported by operations across four continents. The outlook suggests average earning assets are expected to increase by 4-6% in 2019, benefiting from current strong freight conditions. However, the company notes that a decline in economic conditions could lead to increased past due accounts, repossessions, and credit losses.