PACCAR Inc (PCAR) Q1 2023 Earnings Call Transcript

For the period ending March 31, 2023

April 25, 2023 11:00 a.m. ET

Prepared Remarks

Questions and Answers

Call Participants

Prepared Remarks:

Operator

Good morning, and welcome to PACCAR's First Quarter 2023 Earnings Conference Call. All lines will be in a listen-only mode until the question-and-answer session. Today's call is being recorded.

I would like to introduce Mr. Ken Hastings, PACCAR's Director of Investor Relations. Mr. Hastings, please go ahead.

Ken Hastings - Director of IR

Good morning. We would like to welcome those listening by phone and those on the webcast. My name is Ken Hastings, PACCAR's Director of Investor Relations. And joining me this morning are Preston Feight, Chief Executive Officer; Harrie Schippers, President and Chief Financial Officer; and Michael Barkley, Senior Vice President and Controller.

As with prior conference calls, we ask that any members of the media on the line participate in a listen-only mode. Certain information presented today will be forward-looking and involve risks and uncertainties, including general economic and competitive conditions that may affect expected results. For additional information, please see our SEC filings and the Investor Relations page of paccar.com.

I would now like to introduce Preston Feight.

Preston Feight - CEO

Hi, good morning. Harrie Schippers, Michael Barkley, Ken Hastings and I will update you on our first quarter results and our business highlights.

PACCAR achieved record revenues and excellent net income in the first quarter due to continued strong global demand for trucks, aftermarket parts and financial services. PACCAR's revenues increased 31% to $8.47 billion and net income was $734 million, including an after-tax non-recurring charge of $446 million. The charge release to civil claims in Europe was previously reported in an 8-K last week and is the total estimated cost. Excluding the non-recurring charge, first quarter adjusted net income was $1.180 million, up from $600 million in the first quarter of last year.

In the first quarter, Truck, Parts and Other gross margins expanded to a record 19.3%, compared to 15.9% in the fourth quarter of last year. PACCAR is benefiting from investments in new truck models, global growth and PACCAR Parts continued expansion. PACCAR Parts first quarter revenues increased by 17% to a record $1.62 billion. Parts pretax profits were a record $439 million or 29% higher than the same period last year. PACCAR Financial had an excellent quarter, achieving pretax income of $149 million, which is similar to the same quarter of last year.

I appreciate PACCAR's outstanding employees, who delivered these excellent financial results and the highest quality trucks and transportation solutions in the industry. Their commitment to the company and to our customers is foundational to our success.