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What's in Store for PACCAR (PCAR) this Earnings Season?
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PACCAR Inc. (PCAR - Free Report) is set to report third-quarter 2016 results before the market opens on Oct 25. In the last quarter, the company had delivered a positive earnings surprise of 2.91%. Further, PACCAR posted positive earnings surprises in three of the trailing four quarters with an average beat of 1.65%. Let’s see how things are shaping up for this announcement.
Factors Influencing this Quarter
PACCAR is well positioned in the key non-U.S. markets due to its strategic investments. The company continues to expand its global network of strategically located parts distribution centers. These factors should positively impact third-quarter earnings.
Moreover, in 2016, industry sales in the above 16-ton truck market in Europe are expected in the range of 280,000–300,000 units, up from the prior range of 260,000–290,000 units, and higher than 269,000 units sold in 2015. The market is benefiting from positive economic growth and increased freight activity. Higher industry sales should translate into higher sales for the company as long as it maintains or increases its market share.
However, Class 8 industry retail sales for the U.S. and Canada are expected to be in the range of 220,000–250,000 units in 2016, lower than the prior projection of 230,000–260,000 units as well as 278,000 units sold in 2015. This indicates the possibility of a year-over-year decline in the third quarter as well, which may adversely impact the company’s results. Moreover, the company faces stiff competition in the commercial truck market.
Earnings Whispers
Our proven model does not conclusively show that PACCAR is likely to beat earnings this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. This is not the case here, as you will see below:
Zacks ESP: The Earnings ESP represents the difference between the Most Accurate estimate and the Zacks Consensus Estimate. PACCAR has an Earnings ESP of -2.02% because the Most Accurate estimate is 97 cents, while the Zacks Consensus Estimate is pegged at 99 cents.
Zacks Rank: PACCAR’s Zacks Rank #3 increases the predictive power of ESP. However, we need to have a positive ESP to be confident about an earnings surprise.
Stocks to Consider
Here are some auto companies you may want to consider as our model shows that these have the right combination of elements to post an earnings beat this quarter:
Fox Factory Holding Corp (FOXF - Free Report) has an Earnings ESP of +2.56% and a Zacks Rank #1. The company’s third-quarter 2016 financial results are expected to release on Nov 2.
Magna International Inc. (MGA - Free Report) has an Earnings ESP of +2.50% and a Zacks Rank #2. The company’s third-quarter 2016 financial results are expected to release on Nov 3.
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What's in Store for PACCAR (PCAR) this Earnings Season?
PACCAR Inc. (PCAR - Free Report) is set to report third-quarter 2016 results before the market opens on Oct 25. In the last quarter, the company had delivered a positive earnings surprise of 2.91%. Further, PACCAR posted positive earnings surprises in three of the trailing four quarters with an average beat of 1.65%. Let’s see how things are shaping up for this announcement.
Factors Influencing this Quarter
PACCAR is well positioned in the key non-U.S. markets due to its strategic investments. The company continues to expand its global network of strategically located parts distribution centers. These factors should positively impact third-quarter earnings.
Moreover, in 2016, industry sales in the above 16-ton truck market in Europe are expected in the range of 280,000–300,000 units, up from the prior range of 260,000–290,000 units, and higher than 269,000 units sold in 2015. The market is benefiting from positive economic growth and increased freight activity. Higher industry sales should translate into higher sales for the company as long as it maintains or increases its market share.
However, Class 8 industry retail sales for the U.S. and Canada are expected to be in the range of 220,000–250,000 units in 2016, lower than the prior projection of 230,000–260,000 units as well as 278,000 units sold in 2015. This indicates the possibility of a year-over-year decline in the third quarter as well, which may adversely impact the company’s results. Moreover, the company faces stiff competition in the commercial truck market.
Earnings Whispers
Our proven model does not conclusively show that PACCAR is likely to beat earnings this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. This is not the case here, as you will see below:
Zacks ESP: The Earnings ESP represents the difference between the Most Accurate estimate and the Zacks Consensus Estimate. PACCAR has an Earnings ESP of -2.02% because the Most Accurate estimate is 97 cents, while the Zacks Consensus Estimate is pegged at 99 cents.
PACCAR INC Price and EPS Surprise
PACCAR INC Price and EPS Surprise | PACCAR INC Quote
Zacks Rank: PACCAR’s Zacks Rank #3 increases the predictive power of ESP. However, we need to have a positive ESP to be confident about an earnings surprise.
Stocks to Consider
Here are some auto companies you may want to consider as our model shows that these have the right combination of elements to post an earnings beat this quarter:
Fox Factory Holding Corp (FOXF - Free Report) has an Earnings ESP of +2.56% and a Zacks Rank #1. The company’s third-quarter 2016 financial results are expected to release on Nov 2.
The Goodyear Tire & Rubber Company (GT - Free Report) , expected to report third-quarter 2016 financial results on Nov 3, has an Earnings ESP of +1.75% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
Magna International Inc. (MGA - Free Report) has an Earnings ESP of +2.50% and a Zacks Rank #2. The company’s third-quarter 2016 financial results are expected to release on Nov 3.
Confidential from Zacks
Beyond this Analyst Blog, would you like to see Zacks' best recommendations that are not available to the public? Our Executive VP, Steve Reitmeister, knows when key trades are about to be triggered and which of our experts has the hottest hand. Click to see them now>>