PACCAR Inc. (NASDAQ:PCAR) Q1 2024 Earnings Conference Call April 30, 2024 11:00 AM ET

Company Participants

Ken Hastings – Director of Investor Relations
Preston Feight – Chief Executive Officer
Harrie Schippers – President and Chief Financial Officer
Brice Poplawski – Vice President and Controller

Conference Call Participants

Tami Zakaria – JPMorgan
Angel Castillo – Morgan Stanley
Rob Wertheimer – Melius Research
Steve Volkmann – Jefferies
Jaime Cook – Truist
Chad Dillard – Bernstein
David Raso – Evercore ISI
Jeff Kauffman – Vertical Research Partners

Operator

Good morning and welcome to PACCAR’s First Quarter 2024 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 any objection, they should disconnect at this time.

I’d now like to introduce Mr. Ken Hastings, PACCAR’s Director of Investor Relations. Mr. Hastings, please go ahead.

Ken Hastings

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 Brice Poplawski, Vice President and Controller. As with prior conference calls, we will 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 considerations 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

Hey, good morning. Harrie, Brice, Ken and I will update you on our excellent first quarter results and business highlights. I’d like to begin by thanking PACCAR’s outstanding employees who do a great job providing our customers with the highest quality trucks and transportation solutions in the industry. PACCAR achieved excellent revenues and net income in the first quarter due to the strong performance of its truck, aftermarket parts and financial services businesses. PACCAR achieved revenues of $8.74 billion and net income of $1.2 billion. This is comparable to adjusted net income of $1.18 billion in the first quarter of last year. Truck parts and other gross margins were 19% in the first quarter. PACCAR’s margin is benefiting from investments in new truck models, good global performance and PACCAR Parts continued growth.

PACCAR Parts achieved record quarterly pretax income of $456 million, 6% higher than the $439 million earned in the first quarter of 2023. 2024 quarterly parts revenues increased to $1.68 billion and we are pleased with the continued growth at PACCAR Parts after a record setting 2023. PACCAR Financial had a good quarter, achieving pretax income of $114 million. These results are comparable to the fourth quarter of 2023. Looking at the U.S. economy, GDP is estimated to grow 2.4% this year with a resilient labor market and healthy consumer spending. The vocational sector, where Peterbilt and Kenworth are the market leaders, remains strong with continued infrastructure investments. The less than truckload market is also performing well while being offset by a softer truckload segment. Kenworth and Peterbilt’s share in the first quarter was 30.3%, up from 27% in the same period last year.