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Paccar (PCAR) Up 14.1% Since Last Earnings Report: Can It Continue?
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It has been about a month since the last earnings report for Paccar (PCAR - Free Report) . Shares have added about 14.1% 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 its most recent earnings report in order to get a better handle on the important drivers.
PACCAR's Q3 Earnings Beat Estimates
PACCAR reported earnings of $2.21 per share for third-quarter 2022 beat the Zacks Consensus Estimate of $2.01 and rocketed 109% from the year-ago figure. Higher-than-expected pretax income from Trucks, Parts and Financial Services segments resulted in the outperformance.
Consolidated revenues (including trucks and financial services) came in at $7,059 billion, up from $5,146.8 million recorded in the corresponding quarter of 2021. Sales from Trucks, Parts and Others were $6,687 million, which marginally missed the consensus mark of $6,692 million.
Key Takeaways
Revenues from the Trucks segment totaled $5,198.2 million in the September quarter, higher than the prior-year quarter’s $3,452.6 million. The figure, however, missed the consensus mark of $5,313 million. The segment’s pre-tax income was $430.5 million, surpassing the consensus mark of $385 million and increasing a whopping 438% year over year.
Revenues from the Parts segment totaled $1,472 million in the reported quarter, increasing from the year-earlier period’s $1,260 million and surpassing the consensus mark of $1,431 million. The segment’s pre-tax income came in at $374 million, up 32.6% on a yearly basis. The metric also outpaced the consensus mark of $353 million.
Revenues of the Financial Services segment declined to $372 million from the year-earlier quarter’s $409 million but came in line with the consensus estimate. Pre-tax income rose to $146 million from $120 million and came higher than the consensus mark of $142 million.
Other sales amounted to $17.3 million. Pretax income from the unit rose to $29.4 million from $4.6 million in the year-ago period.
Selling, general and administrative expenses in third-quarter 2022 inched up to $171 million from the prior-year period’s $168.6 million. Research & development (R&D) expenses were $82.9 million compared with the year-earlier quarter’s $72.5 million.
PACCAR’s cash and marketable debt securities amounted to $4,762.9 million as of Sep 30, 2022, compared with $4,813 million on Dec 31, 2021.
Capex and R&D expenses for 2022 are envisioned in the band of $475-$500 million and $330-$340 million, respectively. For 2023, capital expenditure and R&D costs are projected to be between $525 million and $575 million and $350 million and $400 million, respectively.
During the quarter, the company declared a cash dividend of 37 cents per share, marking an increase from the last payout. The dividend will be paid out on Dec 6 to shareholders of record as of Nov 15.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended upward during the past month.
The consensus estimate has shifted 5.21% due to these changes.
VGM Scores
Currently, Paccar has an average Growth Score of C, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a grade of B on the value side, putting it in the second quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Paccar has a Zacks Rank #1 (Strong Buy). We expect an above average return from the stock in the next few months.
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Paccar (PCAR) Up 14.1% Since Last Earnings Report: Can It Continue?
It has been about a month since the last earnings report for Paccar (PCAR - Free Report) . Shares have added about 14.1% 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 its most recent earnings report in order to get a better handle on the important drivers.
PACCAR's Q3 Earnings Beat Estimates
PACCAR reported earnings of $2.21 per share for third-quarter 2022 beat the Zacks Consensus Estimate of $2.01 and rocketed 109% from the year-ago figure. Higher-than-expected pretax income from Trucks, Parts and Financial Services segments resulted in the outperformance.
Consolidated revenues (including trucks and financial services) came in at $7,059 billion, up from $5,146.8 million recorded in the corresponding quarter of 2021. Sales from Trucks, Parts and Others were $6,687 million, which marginally missed the consensus mark of $6,692 million.
Key Takeaways
Revenues from the Trucks segment totaled $5,198.2 million in the September quarter, higher than the prior-year quarter’s $3,452.6 million. The figure, however, missed the consensus mark of $5,313 million. The segment’s pre-tax income was $430.5 million, surpassing the consensus mark of $385 million and increasing a whopping 438% year over year.
Revenues from the Parts segment totaled $1,472 million in the reported quarter, increasing from the year-earlier period’s $1,260 million and surpassing the consensus mark of $1,431 million. The segment’s pre-tax income came in at $374 million, up 32.6% on a yearly basis. The metric also outpaced the consensus mark of $353 million.
Revenues of the Financial Services segment declined to $372 million from the year-earlier quarter’s $409 million but came in line with the consensus estimate. Pre-tax income rose to $146 million from $120 million and came higher than the consensus mark of $142 million.
Other sales amounted to $17.3 million. Pretax income from the unit rose to $29.4 million from $4.6 million in the year-ago period.
Selling, general and administrative expenses in third-quarter 2022 inched up to $171 million from the prior-year period’s $168.6 million. Research & development (R&D) expenses were $82.9 million compared with the year-earlier quarter’s $72.5 million.
PACCAR’s cash and marketable debt securities amounted to $4,762.9 million as of Sep 30, 2022, compared with $4,813 million on Dec 31, 2021.
Capex and R&D expenses for 2022 are envisioned in the band of $475-$500 million and $330-$340 million, respectively. For 2023, capital expenditure and R&D costs are projected to be between $525 million and $575 million and $350 million and $400 million, respectively.
During the quarter, the company declared a cash dividend of 37 cents per share, marking an increase from the last payout. The dividend will be paid out on Dec 6 to shareholders of record as of Nov 15.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended upward during the past month.
The consensus estimate has shifted 5.21% due to these changes.
VGM Scores
Currently, Paccar has an average Growth Score of C, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a grade of B on the value side, putting it in the second quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Paccar has a Zacks Rank #1 (Strong Buy). We expect an above average return from the stock in the next few months.