PACCAR, Inc. (PCAR) Q3 2022 Earnings Call Transcript

For the period ending September 30, 2022

October 25, 2022 12:00 p.m. ET

Prepared Remarks

Questions and Answers

Call Participants

Prepared Remarks:

Operator

Good morning, and welcome to PACCAR's Third Quarter 2022 Earnings Conference Call. All lines will be in a listen-only mode until the question-and-answer session. 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, 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 - CEO.

Preston Feight - CEO

Good morning. Harrie Schippers, Michael Barkley and I will update you on our third quarter financial results and other business highlights.

I truly appreciate all of PACCAR's outstanding employees who delivered record third quarter results in the highest quality trucks and transportation solutions to our customers around the world.

PACCAR's third quarter net income more than doubled to $769 million and revenues increased 37% to $7.06 billion. PACCAR parts pre-tax profits were a record $374 million, 32% higher than the same period last year. Parts third quarter revenues increased to a record $1.47 billion. Truck parts and other gross margins expanded to 14.9% in the third quarter compared to 14.4% in the second quarter.

Strong business operating conditions and PACCAR's increased mix of premium new truck models and excellent aftermarket parts business contributed to the higher gross margins.

PACCAR financials had a year-over-year pre-tax income increase of 22% to $146 million reflecting a high quality portfolio and robust used truck results. We estimate this year's U.S. and Canadian Class 8 market to be in a range of 265,000 to 285,000 trucks and next year to be in a range of 260,000 to 300,000. Overall, the strong truck market is expected to continue as a result of the solid freight volumes, high customer truck utilization and the increased fleet age.