Paccar gave a muted 2024 outlook for Class 8 trucks Tuesday after easily beating earnings estimates for the third quarter. Paccar stock popped near a buy point.
New rival Tesla, which makes the Class 8 fully electric Semi truck, reported earnings last week and Q3 deliveries in early October. But Tesla is still not reporting Semi production and delivery numbers, though it has begun initial deliveries.
Paccar Earnings
Estimates: Analysts expected Paccar earnings to surge 44% to $2.13 a share, according to FactSet. Revenue was seen growing 22%, year over year, to $8.186 billion.
Results: Paccar earnings clocked in at $2.34 per share, with revenue of $8.7 billion. Earnings surged 59%, year over year, but still marked the lowest growth in five quarters. The 23% revenue gain was below the 29% average increase over the prior four quarters.
In its earnings release Tuesday, the heavy truck maker said Q3 results reflected nearly 20% margins on sales of trucks and truck parts. Customers are also replacing older vehicles with new and fuel-efficient Kenworth and Peterbilt trucks, the company said. On top of that, infrastructure spending has boosted the truck business, it added.
Globally, Paccar delivered 50,100 trucks during the quarter, near the midpoint of its own guidance.
Outlook: The company said Tuesday it expects Class 8 truck industry retail sales for 2024 to be in a range of 260,000-300,000 vehicles. That would be down 8% at the midpoint from its estimate for 295,000-315,000 vehicles in 2023.
Wall Street sees Paccar earnings growing 49% for the full year and falling 18% in 2024, FactSet shows.
Some analysts anticipate a production slowdown in the market next year for Class 8 trucks — those with the heaviest on-road hauling capabilities. Some companies also have warned of a freight recession.
Paccar Stock Rises Near Buy Point
Shares of the medium- and heavy-duty truck maker jumped 4.3% to 84.83 in Tuesday's stock market action. Paccar stock regained the 50-day moving average. PCAR shares had slumped into the Q3 earnings report, declining for five consecutive sessions.
Paccar stock has formed a 13-week flat base. Shares closed 6% below the 90.05 buy point on Tuesday, according to MarketSmith chart.
The flat base, which has formed since late July, is a sign of resilience in a stock market correction. Overall market conditions remain challenging and discourage new purchases. But investors could build watchlists for the next uptrend.
Tesla shares also rose Tuesday. Tesla stock has found support at the 200-day moving average after reporting lackluster earnings and outlook last Wednesday.
Class 8 Trucks Slowing?
In July, Paccar estimated Q3 deliveries of 48,000 to 52,000 trucks, saying that reflects the normal summer shutdown in Europe.
Since then, the United Auto Workers has initiated and expanded strikes against automakers, including at Mack truck plants. Late Thursday, Mack President Stephen Roy called the union's new economic demands "completely unrealistic."
Mack, a Paccar rival, is part of Volvo Group North America.
PCAR Stock: Electric Semi Trucks
The company said Tuesday it is increasing its investments in fuel-efficient diesel and electric-powertrain technologies.
Fully electric big rigs are starting to roll on America's highways.
After years of delays, Tesla delivered the first Semi Class 8 trucks to PepsiCo last December and delivered 12 more in April. Food and beverage giant Pepsi is using the fully electric Semi for some deliveries.
The new Kenworth T680E and Peterbilt 579EV, both Class 8 electric trucks from Paccar subsidiaries, also tap this market. Volvo, Daimler subsidiary Freightliner and U.S. startup Nikola have also made inroads here.
Commercial fleet customers are upgrading to fuel-efficient trucks as gas prices soar, Paccar says.
In the past year, Paccar stock staged a series of breakouts on the back of stronger-than-expected earnings growth. PCAR has consolidated since the summer near two-decade highs. It is now up more than 28% year to date, though 6% below its July high.
