Truck manufacturer PACCAR Inc. is sold out of Peterbilt, Kenworth and DAF Trucks around the world and has more than a third of the backlog of the industry’s unbuilt orders, the company said in reporting Q2 financial results Tuesday.
The Bellevue, Washington-based heavy- and medium-duty truck manufacturer beat top- and bottom-line Q2 financial estimates and set several quarterly records along the way.
The company delivered 40,100 units globally among its three brands. U.S. retail share combined for Peterbilt and Kenworth was 29.4%, second only to market leader Daimler Trucks North America.
PACCAR (NASDAQ: PCAR) said it took in 42% of the industry’s orders for new trucks in the first half of the year. And it is responsible for 36% of the backlog of unbuilt trucks industrywide for the three months ending June 30.
But the recovery from the pandemic-impacted quarter a year ago had challenges. PACCAR is holding 6,500 “red-tagged” unfinished trucks because it could not get semiconductors due to a global shortage of microchips used in everything from coffee makers to advanced safety systems in vehicles.
“There is a lot of uncertainty around the supply base. Deliveries in the third quarter and beyond will depend on the ability of the supply base to deliver, especially in the semiconductor area,” Harrie Schippers, PACCAR president and chief financial officer, said on an earnings call with analysts.
“Deliveries in the third quarter and beyond will depend on the ability of the supply base to deliver, especially in the semiconductor area.”Harrie Schippers, PACCAR president and chief financial officer
Added CEO Preston Feight: “Customers are looking for trucks as quick as they can get them. And we’re building them as quick as we can. As we get the components, which is unclear in the semiconductor front, we complete the trucks and get them to our customers.”
PACCAR assembled and held 3,000 trucks for semiconductors in the first quarter, eventually finishing them and booking the revenue in the most recent quarter.
Electric truck orders
PACCAR globally has taken 450 orders for battery-powered electric trucks, about the pace that Feight has predicted previously.
“The orders have been spread out. There have been medium-duty orders. There have been heavy-duty orders in the pickup and delivery space and there’s also been refuse kind of trucks that we’ve taken good orders from,” Feight said.
“Anywhere where urban applications, where you’re running 200 miles and you’re coming back at night so you have time to recharge, those are the right spots for the battery-electric systems today and we’re doing that in Europe and in North America.”
PACCAR was among the investors in the recent private investment in public equity at Aurora Innovation, which PACCAR chose as a partner for Level 4 high-autonomy software systems.
Feight declined to say how much the company invested.
“Our thinking around it was just to make sure we had a strong partnership with them,” he said. “The real focus is developing a PACCAR-specific autonomous vehicle platform that will work with Aurora and also work with others. That’s where our focus has been.”
Aurora, which projects having a driverless system for trucks by the end of 2023 has “turned into a great partner.”
“We’ve been riding around in the autonomous trucks with them, and there’s great progress being made on the development of an L4 system,” Feight said.
By the numbers
The maker of Peterbilt, Kenworth and DAF Trucks continued a streak of earnings beats, posting net income of $492.9 million or $1.41 per diluted share, compared to $147.7 million, or 43 cents, in the pandemic-impacted second quarter a year ago. The consensus earnings per share estimate was $1.39, according to investor site Seeking Alpha.
PACCAR beat the consensus estimate for revenue, posting $5.84 billion, up 91% year-over-year from the $3.06 billion in Q2 2020. Analysts estimated $5.5 billion.
Parts revenue and pretax income of $1.21 billion and $265.6 million, respectively, were both records. So was the $106.5 million in Financial Service pretax income. Financial results were boosted by PACLease sales of used trucks, which Schippers said bring a 10% to 20% premium compared to the rest of the industry.