Paccar Inc. set Q4 records for aftermarket parts and financial services while boosting new truck deliveries by 45% over Q3, all contributors to top- and bottom-line beats of analysts’ estimates in financial results.
The Bellevue, Washington-based parent of the Kenworth, Peterbilt and DAF truck brands said it earned $511.4 million, or $1.47 per diluted share, in the October-December 2021 period, 26% higher than the same quarter a year ago. Quarterly revenues of $6.69 billion outpaced the $5.57 billion reported in Q4 2020.
The top- and bottom-line numbers beat analyst estimates of $1.31 per share and $5.44 billion in revenue, according to investor site Seeking Alpha.
For the full year, Paccar (NASDAQ: PCAR) posted revenues of $23.52 billion, compared to revenues of $18.73 billion in 2020. The company earned $1.85 billion, or $5.32 a share, in 2021, compared to $1.30 billion, or $3.74, in 2020. It was Paccar’s 83rd consecutive year of posting net profits.
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New truck deliveries by the three Paccar brands totaled 47,600, surging 45% ahead of Q3. CEO Preston Feight said a slight improvement in the supply chain helped.
Missing semiconductors led to “red-tagging” of nearly completed trucks for most of 2021. Paccar was among truck manufacturers to build and park unfinished trucks rather than holding off on assembly because of parts shortages.
2021 market share of 29.2%
In the U.S. and Canada, where total Class 8 industry deliveries totaled 250,000 trucks, Kenworth and Peterbilt held a 29.2% share trailing market leader Daimler Truck. Paccar projects 250,000 to 290,000 Class 8 truck sales across the industry this year based on good economic growth and strong freight demand.
Kenworth, Peterbilt and DAF all introduced new versions of key heavy- and medium-duty trucks during the year. Paccar began selling battery-powered electric trucks and partnered with startup Aurora Innovation to field driverless trucks as soon as late 2023.
“The new Kenworth T680 and Peterbilt 579 vehicles provide customers with up to 7% increased fuel efficiency, which enhances their operating performance and benefits the environment,” Darrin Siver, Paccar senior vice president, said in a press release.
But it was the aftermarket parts and financial services businesses that set Q4 records following record performances in Q3.
Paccar Parts set a record with $306.4 million in Q4 pretax income, 38% higher than the $222.5 million earned in the same quarter a year ago. Annual pretax income was $1.10 billion, also 38% higher than the $799.3 million earned in 2020.
“Paccar Parts provides strong profitability through all phases of the business cycle,” said David Danforth, general manager of the parts division. The company’s 18 global parts distribution centers serve more than 2,000 Kenworth, Peterbilt and DAF dealerships. A 19th PDC will open this year in Louisville, Kentucky.
Driven by higher used truck prices, Paccar Financial Services set a Q4 record with pretax income of $134.6 million, more than double the $63.8 million from the same quarter a year ago. Used truck prices at auction rose more than 96% across the industry during 2021, according to J.D. Power Valuation Services.
For the full year, Paccar Financial Services earned a record $437.6 million of pretax profit in 2021, 96% above the $223.1 million earned in 2020. PFS revenues were $1.69 billion in 2021 compared to $1.57 billion in 2020.
Shareholders got a taste of the strong financials as Paccar paid cash dividends of $2.84 per share during the year. That included a $1.50 per share cash dividend paid this month.
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