It has been about a month since the last earnings report for Paccar (PCAR). Shares have added about 6% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Paccar due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
PACCAR Q3 Earnings Beat Expectations, Revenues Decline Y/Y
PACCAR recorded earnings of $1.85 per share for the third quarter of 2024, which beat the Zacks Consensus Estimate of $1.82 but declined from $2.34 per share recorded in the year-ago period.
Consolidated revenues (including trucks and financial services) came in at $8.24 billion, down from $8.70 billion in the corresponding quarter of 2023. Sales from Trucks, Parts and Others were $7.7 billion.
Key Takeaways
Revenues from the Trucks segment totaled $6.02 billion in the third quarter, which was lower than the prior-year quarter’s $6.6 billion but surpassed our estimate of $5.93 billion. Global truck deliveries came in at 44,900 units, higher than our projection of 43,008 units. The segment’s pre-tax income was $630.8 million, which fell short of our estimate of $703.9 million and decreased 34.3% year over year.
Revenues from the Parts segment totaled $1.66 billion in the reported quarter, up from the year-earlier period’s $1.58 billion. Our estimate was $1.65 billion. The segment’s pre-tax income came in at $406.7 million, down from $412.3 million reported in the year-ago period. The metric, however, topped our forecast of $329.1 million.
Financial Services segment revenues came in at $536.1 million, higher than the year-ago quarter’s $464.1 million and our estimate of $530 million. Pre-tax income decreased to $106.5 million from $133.8 million reported in the year-ago period and also fell short of our projection of $129 million.
Other sales amounted to $19.2 million. Selling, general and administrative expenses in the third quarter of 2024 inched up to $144.3 million from $143.6 million in the prior-year period. Research & development (R&D) expenses were $115 million compared with the year-earlier quarter’s $103.5 million.
PACCAR’s cash and marketable debt securities amounted to $9.2 billion as of Sept. 30, 2024, compared with $8.66 million as of Dec. 31, 2023.
The company declared a quarterly dividend of 30 cents per share to be paid on Dec. 4, 2024, to shareholders as of Nov. 13, 2024.
Capex and R&D expenses for 2024 are envisioned in the band of $760-$800 million and $450-$470 million, respectively.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended downward during the past month.
The consensus estimate has shifted -8.07% due to these changes.
VGM Scores
Currently, Paccar has an average Growth Score of C, though it is lagging a bit on the Momentum Score front with a D. However, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Paccar has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
