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How Things are Shaping Up Ahead of PACCAR (PCAR) Q1 Earnings

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PACCAR Inc. (PCAR - Free Report) is slated to release first-quarter 2022 results on Apr 26, before the opening bell. The Zacks Consensus Estimate for the quarter’s earnings and revenues is pegged at $1.52 per share and $5.83 billion, respectively.

The trucking giant came up with better-than-expected earnings in the last reported quarter on higher-than-anticipated pre-tax profits across all segments. Over the trailing four quarters, PACCAR beat earnings estimates thrice and missed on the other occasion, with the average surprise being 2.5%. This is depicted in the graph below:

PACCAR Inc. Price and EPS Surprise

PACCAR Inc. Price and EPS Surprise

PACCAR Inc. price-eps-surprise | PACCAR Inc. Quote

Trend in Estimate Revisions

The Zacks Consensus Estimate for first-quarter 2022 earnings per share has moved south by 3 cents over the past seven days. Nonetheless, the bottom-line projection calls for a 12.6% increase on a year-over-year basis. The Zacks Consensus Estimate for revenues suggests 7.7% growth from the comparable year-ago period.

Factors to Note

PACCAR’s strong reputation for quality and leading brands — Kenworth, Peterbilt, and DAF — along with rising demand for Class 8 heavy trucks are anticipated to have aided first-quarter sales. Consequently, the consensus mark for revenues from the Trucks segment is pegged at $4,337 million, indicating an improvement from the $4,233 million generated in the year-ago period.

Persistent growth in aftermarket parts — which are less cyclical in nature and carry high margins — is likely to have supported the firm’s quarterly performance. The Zacks Consensus Estimate for revenues from the Parts segment is pegged at $1,256 million, indicating an increase from $1,161 million recorded in the corresponding year-ago period.

While potential revenue growth from the Trucks and Parts segments is likely to buoy PACCAR’s results, manufacturing inefficiencies associated with supply-chain disruptions are anticipated to have played spoilsports. PACCAR is likely to have bore the brunt of the rising commodity prices, which, in turn, may have clipped gross margins. A tough labor market and logistical challenges are also likely to reflect negatively on Q1 earnings. Additionally, high R&D costs to support investments in innovative products and technology might have dented operating profits to some extent.

Earnings Whispers

Our proven model does not conclusively predict an earnings beat for PACCAR for the to-be-reported quarter, as it does not have the right combination of the two key ingredients. A combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter. You can see the complete list of today’s Zacks #1 Rank stocks here.

Earnings ESP: PACCAR has an Earnings ESP of -1.65%. This is because the Most Accurate Estimate is pegged 2 cents below the Zacks Consensus Estimate.

Zacks Rank: It currently carries a Zacks Rank of 3.

Stocks With Favorable Combination

While an earnings beat looks uncertain for PACCAR, here are a few stocks in the auto space, which, according to our model, have the right combination of elements to post an earnings beat for the quarter to be reported:

Allison Transmission (ALSN - Free Report) has an Earnings ESP of +10.35% and a Zacks Rank #3. The stock is set to report first-quarter 2022 earnings on Apr 27.

The Zacks Consensus Estimate for Allison’s to-be-reported quarter’s earnings and revenues is pegged at $1.16 per share and $642 million, respectively. Encouragingly, ALSN surpassed earnings estimates in the last four quarters, with an average of 13.4%.

LKQ Corp (LKQ - Free Report) has an Earnings ESP of +0.37% and a Zacks Rank #3. The stock is set to report first-quarter 2022 earnings on Apr 28.

The Zacks Consensus Estimate for LKQ’s to-be-reported quarter’s earnings and revenues is pegged at 91 cents per share and $3.28 billion, respectively. Encouragingly, LKQ surpassed earnings estimates in the last four quarters, with an average of 33.9%.

Cummins, Inc. (CMI - Free Report) has an Earnings ESP of +1.68% and a Zacks Rank #3. The stock is set to report first-quarter 2022 earnings on May 3.

The Zacks Consensus Estimate for Cummins’ to-be-reported quarter’s earnings and revenues is pegged at $3.55 per share and $6.02 billion, respectively. Over the trailing four quarters, CMI surpassed earnings estimates twice for as many misses, with an average surprise of 0.5%.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.