Paccar Inc. CEO Preston Feight might be forgiven for taking a victory lap celebrating the truckmaker’s eighty fifth consecutive yr of net profits.
No forgiveness needed. The corporate’s leader since 2019 declined to brag. That’s not the Paccar way. Humility, consistency and conservatism rule the day in Bellevue, Washington, where suit and tie is common attire even in a business culture that has come to eschew such formality.
In the corporate’s earnings release on Tuesday, Feight thanked the 31,100 global employees at Paccar’s three brands: DAF Truck, Kenworth and Peterbilt. He frequently calls them out for his or her performance. The discharge also pointed to 85 consecutive years of net profit and a streak of dividend payouts that stretches to 1941.
Humility on display
Several analysts on the corporate’s earnings call Tuesday offered Feight obligatory “great quarter” comments before in search of answers to questions they hoped would help tweak their economic models toward ending an prolonged streak of underestimating Paccar’s revenue and earnings performance.
Feight typically acknowledges those sentiments in the identical perfunctory manner wherein they’re offered. It was a little bit different this time.
“Well, to begin with, thanks for the comment on the yr,” he told Angel Castillo of Morgan Stanley. “I feel our team deserves an incredible amount of credit all world wide for the wonderful performance.”
Acknowledging but deflecting praise is as near celebrating as Feight got here.
Bonkers 2023 results
Record results nearly across the board included $35.1 billion in consolidated revenue from trucks, parts and financial services, a 13.1% after-tax return, and income of $4.6 billion. Paccar delivered 109,000 Kenworth and Peterbilt trucks in North America. DAF delivered a record 63,000 trucks in Europe and other global markets.
Even the analysts who didn’t offer compliments had some influence on investors who drove Paccar shares to a near-record close of $101.01. Since a 3:2 split a yr ago, Paccar shares have been on a tear, rising from $67.48 to a 52-week high of $102.20. The intraday price Wednesday was $101.30.
Analysts badly botched their estimates for Paccar’s Q4 results, The consensus by investor site In search of Alpha predicted $2.21 per share on revenues of $8.3 billion. Paccar beat the per share number by a whopping 49 cents. A miss of a couple of pennies sometimes registers as notable.
Such inaccuracies can suggest poor company guidance. Nobody points to that with Paccar, which has beaten EPS estimates 88% of the time and revenue estimates 100% of the time over the past two years.
Winning equation: Recent trucks, parts sales and financing
So, how does Paccar do it?
An almost all-new product lineup at its three brands is an element. The most recent makeover, the Class 8 Peterbilt Model 589, enters production this month in Denton, Texas. It replaces the venerable long-nose Model 389 that had such a following that about 200 of them showed up at a celebration outside of the Texas Motor Speedway in May where the Model 589 debuted.
![](https://www.freightwaves.com/wp-content/uploads/2024/01/24/012424-Peterbilt-Model-589-1200x675.jpg)
“Now we have refreshed our entire product lineup in the previous couple of years,” Feight said. “Now we have really high-performing products which are delivering excellent results to the shoppers.”
Paccar trails only market leader Daimler Truck North America in sales, which rose 4% in 2023, below expected levels but higher than parent Daimler Truck AG’s 1% overall unit sales gain. Sales of International-branded trucks from Traton Group subsidiary Navistar rose 9% to 75,500 in 2023. Volvo Group reports its Q4 results Friday.
Paccar Parts leverages ordering and inventory processes to hurry deliveries. Its growing global footprint features a $91.5 million investment in a 240,000-square-foot parts distribution center in Massbach, Germany. Its twentieth PDC brings total dedicated space to greater than 3.3 million square feet. Paccar Parts reported a 19.4% gross margin in Q4 and sees only a slight pullback in Q1.
More of the identical
Feight said a 15% to twenty% pullback in equipment sales in Europe where DAF Trucks operates is probably going for this yr. Unlike others expecting a downturn in North American truck equipment orders, Feight is upbeat.
“So far as the slowdown in orders, I’m undecided I can recognize that in our major North American markets,” he said. “We see good order intake and good visibility.” Q1 construct slots are gone, and Q2 is filling up.”
As Muhammad Ali said: “It’s not bragging in the event you can back it up.”
Related articles:
Paccar Q4 sales, profit records overwhelm analyst estimates
Peterbilt kicks out the jams to introduce Model 589
Peterbilt reveals major redesign of flagship Class 8 Model 579
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