PACCAR Inc. (PCAR) Earnings

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Sep 2026upcoming

Next quarter

Reports Oct 20, 2026.

Consensus is $1.61 EPS for Sep 2026 across 6 estimates, ranging $1.53 to $1.77.

PCAR Jun 2026

Reported Jul 28, 2026

: 7.52%
: -3.14%

: $1.33
: $1.43
: —
: $7.55B

Reported results

: $7.55B; from $7.51B
: 20.64%; from 20.17%
: $752.00M; from $723.80M
: $1.43; from $1.37

Highlights

Earnings beat: Q2 diluted EPS was $1.43, ahead of the $1.33 consensus by 7.52%; net income rose 24% sequentially to $752.0 million.
Sequential recovery: Revenue increased 11.3% from $6.78 billion in Q1 to $7.55 billion, while EPS rose from $1.15 to $1.43.
Truck profitability improved: Truck pre-tax income increased 17% year over year to $360.5 million and return on revenue expanded to 6.9% from 5.9%, helped by pricing and lower tariff costs.
Volumes remained soft: Global truck deliveries declined 2% year over year to 38,700 units; first-half deliveries fell 10% to 71,800, with North America down 12% and other markets down 27%.
Parts set a record: PACCAR Parts revenue reached $1.75 billion, up 2% year over year, although pre-tax margin eased to 23.9% from 24.2%.
Financial Services was stable but credit costs rose: Pre-tax income was $124.1 million versus $123.2 million a year ago, while provision for receivable losses increased to $39.4 million from $29.2 million.
Second-half backdrop improved: Management cited stronger orders, higher freight rates and constrained freight capacity; the U.S. and Canada Class 8 market outlook remains 230,000-270,000 trucks for 2026.
Investment plan unchanged: 2026 capital spending is projected at $700-$750 million and R&D at $450-$480 million, focused on clean-diesel, hybrid, battery-electric and connected-vehicle technologies.

Analysis

PACCAR's second quarter was a better-than-expected sequential recovery, led by stronger truck profitability rather than unit growth. Diluted EPS of $1.43 exceeded the $1.33 consensus by 7.52%, while revenue of $7.55 billion rose 11.3% from Q1's $6.78 billion and 0.5% from $7.51 billion a year ago. Net income of $752.0 million increased 24% sequentially and 3.9% year over year, lifting after-tax return on revenue to 10.0% from 9.6% a year ago.

The key operating feature was improved Truck economics: pricing, lower tariff costs and lower factory overhead more than offset a 2% decline in global deliveries to 38,700 units, raising Truck pre-tax income 17% to $360.5 million. PACCAR Parts provided recurring support with record revenue of $1.75 billion, though its 23.9% pre-tax margin was modestly below last year's 24.2%. Financial Services earnings were broadly flat as better finance margins and used-truck results offset higher credit provisions. The main watchpoint is credit: first-half provisions rose to $83.5 million from $47.5 million, and modifications for financially challenged customers increased to $323.5 million from $141.6 million. Full-year spending and market outlooks were maintained.

Truck margins and volumes

Profitability: Truck revenue was $5.25 billion, essentially flat year over year, but pre-tax income rose 17% to $360.5 million. Pre-tax return on revenue expanded to 6.9% from 5.9%, while gross margin improved to 9.4% from 8.7%.
Price-cost mix: Higher average truck prices added $86.8 million to revenue, while lower tariff and product-support costs helped offset $27.3 million of higher average material, labor and other direct costs.
Deliveries: Global deliveries declined to 38,700 from 39,300. North America fell 4% to 22,000 units and other markets fell 4% to 5,500, partly offset by a 6% increase in Europe to 11,200.
First-half context: Truck revenue fell 7% to $9.78 billion and pre-tax income fell 20% to $536.7 million in the first half, reflecting a 10% decline in deliveries despite pricing support.

Freight-driven order recovery

Management attributed higher build rates during the quarter to strong orders, improved freight rates and constrained industry capacity. Fleet age has also increased, creating an opportunity for replacement with newer, more fuel-efficient trucks. The 2026 U.S. and Canada Class 8 retail market estimate remains 230,000-270,000 units, versus 232,800 in 2025. Europe is expected at 290,000-330,000 vehicles above 16 tonnes, while South America is projected at 100,000-110,000. PACCAR also said EPA clarification of emissions requirements should help customers make purchasing decisions for the second half of 2026 and 2027.

Parts recurring earnings

Record revenue: PACCAR Parts revenue rose 2% to $1.75 billion, driven primarily by Europe and favorable currency translation; first-half revenue reached $3.46 billion, up 1%.
Profit contribution: Quarterly pre-tax income was $417.0 million, broadly unchanged from $416.5 million, while pre-tax return on revenue declined to 23.9% from 24.2%.
Margin pressures: Pricing added $69.3 million to quarterly sales, but lower volume, higher direct costs and warehouse expansion costs limited gross-margin expansion. Parts gross margin was 29.8% versus 30.0% a year ago.
Outlook: Management expects 2026 Parts sales to increase 3%-5%, subject to economic conditions.

Financial Services credit

Stable earnings: Financial Services revenue increased slightly to $549.7 million and pre-tax income to $124.1 million from $123.2 million. Better finance margins, favorable currency and improving used-truck results offset higher provisions.
Lower origination volume: New loan and lease volume fell 10% to $1.66 billion, and finance market share of new PACCAR truck sales declined to 24.7% from 25.9%. Average earning assets were $21.13 billion, down 1% year over year.
Credit costs: Quarterly provision for receivable losses rose to $39.4 million from $29.2 million, while net charge-offs increased to $44.9 million from $24.9 million, primarily because of Brazil's weaker economic and freight conditions.
Portfolio stress: Worldwide retail accounts 30-plus days past due were 2.2%, down from 2.4% at year-end but above 1.2% a year ago. Credit modifications for financially challenged customers reached $323.5 million in the first half, versus $141.6 million in 2025.

Investment and liquidity

Product investment: Q2 capital investments were $138.7 million and R&D expense was $114.3 million. Full-year targets remain $700-$750 million of capital spending and $450-$480 million of R&D.
Cash generation: First-half operating cash flow was $1.67 billion, compared with $1.74 billion a year ago, despite higher net income of $1.36 billion.
Balance sheet: Cash and marketable securities totaled $8.83 billion at June 30, down from $9.52 billion at year-end. PACCAR Financial Services had $22.27 billion of assets and issued $1.38 billion of medium-term notes in the first half.
Capital returns: The company paid $1.09 billion in dividends during the first half and declared a quarterly dividend of $0.35 per share, up from $0.33 a year earlier.

PACCAR Inc.

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