Paccar 2025 Q1 Earnings Misses Targets with Net Income Down 57.7%
Friday, May 2, 2025 7:10 am ET
38min read PCAR Trend
Revenue
Paccar's total revenue in the first quarter of 2025 decreased by 14.9% to $7.44 billion compared to $8.74 billion in the same period last year. The truck segment generated $5.23 billion in revenue, while the parts division contributed a record $1.69 billion. Financial services added $528 million, and other segments accounted for a $2 million decrease, culminating in the overall revenue figure.
Earnings/Net Income
Paccar's EPS fell significantly by 57.9% to $0.96 in 2025 Q1 from $2.28 in 2024 Q1. Concurrently, net income dropped 57.7% to $505.10 million from $1.20 billion in the first quarter of 2024. The decline in EPS and net income reflects ongoing challenges in the market.
Post Earnings Price Action Review
The backtest analysis of Paccar (PCAR) stock price indicates a positive correlation between earnings beats and stock price appreciation. Following earnings reports, revenue, net income, and EPS beats show a consistent trend of stock price increases. Within three days, the stock has a 35% chance of appreciation, which rises to 45% over ten days and 65% over thirty days. The average return on investment is modest, with a 0.01% increase in the three-day window, growing to 1.08% over ten days and 1.90% across thirty days. The maximum observed return following earnings beats was 6.62% over thirty days, highlighting potential upside for medium-term investors. Overall, Paccar's stock generally performs well when surpassing revenue, net income, and EPS expectations, providing a basis for investor decisions.
CEO Commentary
“PACCAR reported good revenues and net income in the first quarter of 2025,” said Preston Feight, Chief Executive Officer. He highlighted that Peterbilt, Kenworth, and DAF delivered good results, while PACCAR Parts achieved record revenue and strong profits. Feight emphasized the exciting and dynamic technological changes within the truck industry, noting that PACCAR’s long-term investments in new truck models and advanced manufacturing will support both customer and company growth. He expressed pride in the employees and dealers for delivering outstanding trucks and solutions, reflecting an optimistic outlook for continued performance despite current market uncertainties.
Guidance
PACCAR projects capital expenditures in the range of $700-$800 million and research and development expenses estimated to be between $450-$480 million for 2025. The company anticipates Class 8 truck industry retail sales in the U.S. and Canada to fall between 235,000 and 265,000 trucks. Additionally, Feight indicated that ongoing investments in next-generation internal combustion, hybrid, and battery-electric powertrains will be crucial for future growth.
Additional News
In the wake of its earnings report, PACCAR Inc declared a regular quarterly cash dividend of thirty-three cents per share, payable on June 4, 2025, to stockholders of record. This decision reflects the company's commitment to returning value to shareholders amidst challenging market conditions. Additionally, PACCAR announced plans to expand its DAF truck factory in Ponta Grossa, Brazil, by 65,000 sq. ft., aimed at increasing capacity and enhancing engine production capabilities. This expansion aligns with PACCAR's strategy to grow its footprint in the South American market, further supported by its investment in a new engine remanufacturing facility in Columbus, Mississippi, which will provide reliable and cost-effective powertrains for current vehicles.
Ask Aime: How does Paccar's (PCAR) earnings miss affect its long-term growth prospects?
