Paccar (PCAR) Down 1% Since Last Earnings Report: Can It Rebound?

It has been about a month since the last earnings report for Paccar (PCAR). Shares have lost about 1% in that time frame, outperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Paccar due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.

PACCAR's Q1 Earnings Top Estimates

PACCAR earnings of $1.72 per share in first-quarter 2022, topping the Zacks Consensus Estimate of $1.51 and rising from the year-ago figure of $1.35. Higher-than-expected revenues across all segments resulted in the outperformance.

Consolidated revenues (including trucks and financial services) came in at $6,472.6 million, up from $5,845.5 million recorded in the corresponding quarter of 2021. Sales from Trucks, Parts and Others were $6,106.4 million, beating the consensus mark of $5,781 million.

Key Takeaways

Revenues from the Trucks segment totaled $4,697.1 million in the March quarter, higher than the prior-year quarter’s $4,233 million. The figure also topped the consensus mark of $4,337 million. The segment’s pre-tax income was $276.7 million, increasing 2.4% year over year.

Revenues from the Parts segment totaled $1,388.9 million in the reported quarter, increasing from the year-earlier period’s $1,160.7 million and surpassing the consensus mark of $1,256 million. The segment’s pre-tax income came in at $340.2 million, up 26% from $251.6.

Revenues in the Financial Services segment declined to $366.2 million from the year-earlier quarter’s $432 million and missed the consensus estimate of $427 million. Nonetheless, pre-tax income rose to $147 million from $76.4 million.

Selling, general and administrative expenses in first-quarter 2022 rose to $183.7 million from the prior-year period’s $161.1 million. Research & development (R&D) expenses were $78 million compared with the year-earlier quarter’s $80.1 million.

PACCAR’s cash and marketable debt securities amounted to $4,672.4 million as of Mar 31, 2022, compared with $4,813 million on Dec 31, 2021.

Capex and R&D expenses for 2022 are envisioned in the band of $425-$475 million and $350-$400 million, respectively.

The company declared a cash dividend of 34 cents in the reported quarter.

 

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed an upward trend in fresh estimates.

The consensus estimate has shifted 7.8% due to these changes.

VGM Scores

At this time, Paccar has a great Growth Score of A, though it is lagging a lot on the Momentum Score front with a D. However, the stock was allocated a grade of A on the value side, putting it in the top 20% for this investment strategy.

Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Paccar has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.

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