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PACCAR (PCAR) Q4 Earnings Miss on Low Truck Deliveries
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PACCAR Inc.’s (PCAR - Free Report) fourth-quarter 2016 earnings decreased 16.3% to 82 cents per share from 98 cents recorded in the year-ago quarter. Earnings also missed the Zacks Consensus Estimate of 87 cents. The results were affected by the decline in truck deliveries in North America.
Operating revenues declined 7.3% year over year to $3.76 billion, missing the Zacks Consensus Estimate of $3.88 billion.
Net sales and financial services revenues decreased to $4.07 million from $4.36 million in the fourth quarter of 2015.
PACCAR posted a year-over-year decline in adjusted earnings to $3.85 per share for full-year 2016 from $4.51 recorded in the prior year. The figure missed the Zacks Consensus Estimate of $3.89. Operating revenues for 2016 declined to roughly $15.8 billion from $17.9 billion in 2015. The figure also missed the Zacks Consensus Estimate of $16.2 billion.
Segment Results
Revenues from the Truck, Parts and Other segment decreased to $3.76 billion in the fourth quarter of 2016 from $4.06 billion in the year-ago quarter. The segment reported pretax income of $334 million compared with $403.6 million a year ago.
Revenues in the Financial Services segment (comprising a portfolio of 178,000 trucks and trailers, with total assets of $12.19 billion) went up 3.7% to $303.7 million. Pre-tax income in the segment declined to $77.9 million from $89.9 million in the year-ago quarter.
Financial Position
PACCAR’s cash and marketable debt securities amounted to $2.92 billion as of Dec 31, 2016 compared with 3.38 billion as of Dec 31, 2015. Long-term debt was absent in both the periods.
The company generated $2.3 billion in cash from operating activities during full-year 2016 compared with $2.6 billion in the prior year.
Capital Deployment
In 2016, PACCAR announced total cash dividend of $1.56 per share, including a special dividend of 60 cents per share. The additional dividend reflects management’s confidence in the business.
In 2016, PACCAR repurchased 1.38 million shares for $70.5 million. During the year, the company’s total shareholders return was 38.3%.
Guidance
PACCAR expects industry sales in the above 16-ton truck market in Europe at around 260,000–290,000 units in 2017.
Further, Class 8 industry retail sales in the U.S. and Canada are estimated to be 190,000-220,000 vehicles.
For 2016, the company targets capital investments of $375–$425 million, and research and development expenses of $250–$280 million for powertrain components, advanced driver assistance and truck connectivity technologies.
Price Performance
PACCAR outperformed the Zacks categorized Auto Manufacturers-Domestic industry in the last three months driven by benefits from a sizeable market share in the U.S. and Canada along with active capital deployment. The company’s expansion plans as well as rising European sales also drove the share price. The company’s shares have gained 23.8% in the last three months, compared with an 18.9% gain recorded by the industry.
Fox Factory has an expected earnings growth rate of around 16.6% for the current year. Penske Automotive has a long-term growth rate of 8.2% while the same for GKN is pegged at 6.3%.
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PACCAR (PCAR) Q4 Earnings Miss on Low Truck Deliveries
PACCAR Inc.’s (PCAR - Free Report) fourth-quarter 2016 earnings decreased 16.3% to 82 cents per share from 98 cents recorded in the year-ago quarter. Earnings also missed the Zacks Consensus Estimate of 87 cents. The results were affected by the decline in truck deliveries in North America.
Operating revenues declined 7.3% year over year to $3.76 billion, missing the Zacks Consensus Estimate of $3.88 billion.
Net sales and financial services revenues decreased to $4.07 million from $4.36 million in the fourth quarter of 2015.
PACCAR Inc. Price, Consensus and EPS Surprise
PACCAR Inc. Price, Consensus and EPS Surprise | PACCAR Inc. Quote
2016 Performance
PACCAR posted a year-over-year decline in adjusted earnings to $3.85 per share for full-year 2016 from $4.51 recorded in the prior year. The figure missed the Zacks Consensus Estimate of $3.89. Operating revenues for 2016 declined to roughly $15.8 billion from $17.9 billion in 2015. The figure also missed the Zacks Consensus Estimate of $16.2 billion.
Segment Results
Revenues from the Truck, Parts and Other segment decreased to $3.76 billion in the fourth quarter of 2016 from $4.06 billion in the year-ago quarter. The segment reported pretax income of $334 million compared with $403.6 million a year ago.
Revenues in the Financial Services segment (comprising a portfolio of 178,000 trucks and trailers, with total assets of $12.19 billion) went up 3.7% to $303.7 million. Pre-tax income in the segment declined to $77.9 million from $89.9 million in the year-ago quarter.
Financial Position
PACCAR’s cash and marketable debt securities amounted to $2.92 billion as of Dec 31, 2016 compared with 3.38 billion as of Dec 31, 2015. Long-term debt was absent in both the periods.
The company generated $2.3 billion in cash from operating activities during full-year 2016 compared with $2.6 billion in the prior year.
Capital Deployment
In 2016, PACCAR announced total cash dividend of $1.56 per share, including a special dividend of 60 cents per share. The additional dividend reflects management’s confidence in the business.
In 2016, PACCAR repurchased 1.38 million shares for $70.5 million. During the year, the company’s total shareholders return was 38.3%.
Guidance
PACCAR expects industry sales in the above 16-ton truck market in Europe at around 260,000–290,000 units in 2017.
Further, Class 8 industry retail sales in the U.S. and Canada are estimated to be 190,000-220,000 vehicles.
For 2016, the company targets capital investments of $375–$425 million, and research and development expenses of $250–$280 million for powertrain components, advanced driver assistance and truck connectivity technologies.
Price Performance
PACCAR outperformed the Zacks categorized Auto Manufacturers-Domestic industry in the last three months driven by benefits from a sizeable market share in the U.S. and Canada along with active capital deployment. The company’s expansion plans as well as rising European sales also drove the share price. The company’s shares have gained 23.8% in the last three months, compared with an 18.9% gain recorded by the industry.
Zacks Rank & Key Picks
PACCAR currently carries a Zacks Rank #3 (Hold).
Some better-ranked companies in the auto space include Fox Factory Holding Corp (FOXF - Free Report) , Penske Automotive Group, Inc. (PAG - Free Report) and GKN plc . All the stocks carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Fox Factory has an expected earnings growth rate of around 16.6% for the current year. Penske Automotive has a long-term growth rate of 8.2% while the same for GKN is pegged at 6.3%.
Zacks' Top 10 Stocks for 2017
In addition to the stocks discussed above, would you like to know about our 10 finest tickers for the entirety of 2017?
Who wouldn't? These 10 are painstakingly hand-picked from 4,400 companies covered by the Zacks Rank. They are our primary picks to buy and hold. Be among the very first to see them >>