PACCAR Inc (PCAR) Q1 2022 Earnings Call Transcript

For the period ending March 31, 2022

April 26, 2022 11:00 a.m. ET

Prepared Remarks

Questions and Answers

Call Participants

Prepared Remarks:

Operator

Good morning, and welcome to PACCAR's First Quarter 2022 Earnings Conference Call. Today's call is being recorded and if anyone has an objection, they should disconnect at this time. I would now 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; Harry Schippers, President and Chief Financial Officer; and Michael Barkley, Senior Vice Present 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

Good morning. Harry Schippers, Michael Barkley and I will update you on our first quarter results and business highlights. PACCAR achieved excellent revenues and net income in the first quarter. PACCAR sales and financial services revenues increased 11% to $6.470 billion. Net income increased 28% to $601 million. PACCAR Parts first quarter revenues increased by 20% to a record $1.39 billion. Parts, pretax profits were a record $340 million, 35% higher than the same period last year. Truck, Parts and Other gross margins expanded to 13.4% in the first quarter compared to 11.6% in the fourth quarter of last year.

PACCAR Financial had a record quarter, increasing pretax income by 92% to $147 million due to healthy new business volume and strong used truck results. I appreciate PACCAR's outstanding employees, who delivered the excellent financial results and the highest quality trucks and transportation solutions in the industry. Last year, PACCAR introduced a complete, new product lineup of Peterbilt, Kenworth and DAF heavy and medium-duty trucks. This was a record number of new product introductions and these investments are generating excellent results for the company.

Our customers are benefiting from the industry-leading fuel efficiency, while drivers love the new digital instrumentation, luxurious interiors, stylish LED headlights and beautiful exterior styling. The new trucks and growth in PACCAR's aftermarket business contributed to the increased gross margins this quarter. We expect gross margins to continue increasing this year as the new trucks become a higher percentage of the build.