Paccar 2025 Q1 Earnings Misses Targets as Net Income Declines 57.7%

Paccar (PCAR) reported its fiscal 2025 Q1 earnings on April 29, 2025, revealing a significant decrease in net income. The company's adjusted earnings per share of $1.46 fell short of analyst expectations, which were set at $1.59. Additionally, sales revenue of $6.91 billion missed the street view of $7.17 billion. Despite these misses, Paccar's guidance remains in line with previous projections, as the company anticipates stable market conditions moving forward. This quarterly outcome underscores challenges faced amidst tariff impacts and economic uncertainties.

Revenue
Paccar reported a total revenue of $7.44 billion in Q1 2025, marking a 14.9% decrease from the $8.74 billion recorded in Q1 2024. The Truck segment contributed $5.23 billion, Parts generated $1.69 billion, and Financial Services added $528 million. Meanwhile, the "Other" category registered a negative $2 million, culminating in the overall revenue figure.

Earnings/Net Income
Paccar's earnings per share fell to $0.96 in Q1 2025, down from $2.28 in Q1 2024, reflecting a 57.9% decline. The reported net income also decreased by 57.7%, from $1.20 billion to $505.10 million. This significant drop in EPS indicates a challenging quarter for the company.

Price Action
The stock price of Paccar climbed 4.19% during the latest trading day, edged up 1.95% during the most recent full trading week, and tumbled 8.05% month-to-date.

Post-Earnings Price Action Review
Following the earnings report, Paccar's stock demonstrated a mixed performance. The stock's price action indicated a potential for short-term gains, with a 30-day win rate of 65%. Despite the earnings miss, historical trends suggested a resilient recovery post-earnings, as the maximum return observed reached 6.62% over 30 days. This pattern underscores the stock's ability to rebound after initial declines, though it does face challenges from ongoing economic conditions and tariff impacts.

CEO Commentary
Preston Feight, Chief Executive Officer, highlighted PACCAR's solid performance in a challenging economic environment, achieving $7.4 billion in revenues and adjusted net income of $770 million. He emphasized the company's strategic investments in technology and its focus on growth in the PACCAR Parts segment, expressing optimism for increased demand in the latter half of the year.

Guidance
PACCAR anticipates truck deliveries between 37,000 and 39,000 units in Q2 2025, with the U.S. and Canadian Class 8 market expected to range from 235,000 to 265,000 trucks. The European market is projected to see 270,000 to 300,000 units. PACCAR Parts is forecasted to grow by 2% to 4% in Q2 and for the full year, with gross margins expected between 13% and 14%.

Additional News
In April 2025, PACCAR announced plans to expand its DAF truck factory in Ponta Grossa, Brazil, by 65,000 square feet. This expansion aims to boost engine production capabilities and support growing market demands. Furthermore, the company is investing in a new engine remanufacturing facility in Columbus, Mississippi, reflecting a strategic move to enhance its powertrain business. PACCAR also revealed a joint venture investment in Amplify Cell Technologies, focusing on developing battery-electric powertrains to complement its existing product lineup.