10-QPeriod: Q2 FY2019

PACCAR INC Quarterly Report for Q2 Ended Jun 30, 2019

Filed August 2, 2019For Securities:PCAR

Summary

PACCAR Inc (PCAR) reported a strong second quarter and first half of 2019, with record net sales and revenues across all segments. The company saw significant year-over-year growth driven by higher truck deliveries, particularly in the U.S. and Canada, and increased demand for parts. The Financial Services segment also contributed positively with record revenues stemming from higher earning assets and improved yields. Net income for the six months ended June 30, 2019, increased by 16.5% to $1.25 billion, or $3.59 per diluted share, compared to $1.07 billion, or $3.04 per diluted share, in the prior year. This performance reflects robust operational execution and favorable market conditions in the trucking industry. PACCAR continues to invest in future growth through capital expenditures and research and development, focusing on new truck models, advanced technologies like electrification, and expanding its parts distribution network.

Financial Highlights

31 data points
Beta

Revenue

$6.63B

Net Income

$619.70M

9.3% Net Margin

EPS (Diluted)

$1.19

Total Assets

$27.17B

Cash & Equivalents

$3.22B

Free Cash Flow

$679.40M

Financial Statements
Beta
Revenue$6.63B
Net Income$619.70M
EPS (Basic)$1.19
EPS (Diluted)$1.19
Shares Outstanding (Basic)520.50M
Shares Outstanding (Diluted)521.55M

Key Highlights

  • 1Record net sales and revenues for both the second quarter and the first six months of 2019, reaching $6.63 billion and $13.12 billion, respectively.
  • 2Truck segment revenues grew 17% year-over-year for the first six months of 2019, driven by a 14% increase in total unit deliveries.
  • 3Parts segment sales increased by 6% for the first six months of 2019, fueled by higher aftermarket demand in North America.
  • 4Financial Services segment revenues rose 6% in the first six months of 2019, supported by growth in earning assets and higher yields.
  • 5Net income for the first six months of 2019 was $1.25 billion, a 16.5% increase compared to the prior year, with diluted EPS of $3.59.
  • 6The company significantly increased capital investments to $308.3 million in the first half of 2019 from $167.7 million in the same period of 2018, alongside increased R&D spending.
  • 7PACCAR expects continued strength in the truck market for 2019, with projected U.S. and Canada retail sales of 300,000-320,000 units and Europe registrations of 300,000-320,000 units.

Frequently Asked Questions

PACCAR experienced strong growth in the first half of 2019 compared to the same period in 2018. Worldwide net sales and revenues increased to $13.12 billion from $11.46 billion, and net income grew to $1.25 billion from $1.07 billion. Diluted earnings per share also increased to $3.59 from $3.04.

The Truck segment saw a 17% revenue increase due to higher deliveries. The Parts segment reported a 6% revenue increase, driven by aftermarket demand. The Financial Services segment also achieved a 6% revenue increase, supported by higher earning assets and yields.

PACCAR anticipates a strong truck market for 2019. The company plans to invest between $675 to $725 million in capital expenditures and $320 to $340 million in R&D, focusing on new truck models, zero-emission technologies, connectivity, and expanding its parts distribution network.

The company is involved in lawsuits related to a European Commission settlement with DAF, seeking unspecified damages. While PACCAR believes it has defenses, an adverse outcome could materially impact results. Additionally, the filing notes potential risks associated with Brexit, impacting U.K. manufacturing and trade, and the transition away from LIBOR for certain financial contracts.