Equipment

Smoother supply chain helps lift Paccar’s Q4 numbers

Jan. 25, 2023

The company’s executives see production rising broadly this year, as well as double-digit growth from their parts business. Paccar's three heavy-duty truck companies delivered more than 50,000 vehicles during Q4 and expects similar figures to start 2023.

Geert De Lombaerde

Paccar CEO Preston Feight wasn’t ready to totally call the end of the supply chain crisis—but he came close.

“The offline units that have been limited by supplier constraints have been largely resolved,” Feight said on a Jan. 24 conference call discussing Paccar’s fourth-quarter results. “So it's fairly behind us right now.”

Feight and CFO Harrie Schippers were careful to hedge that supply chain issues could still pop up this year, but they foresee that the parent company of Peterbilt, Kenworth, and Daf will be able to ramp up production across its manufacturing footprint. If their outlook materializes and is indicative of a broader trend among original equipment manufacturers, fleet executives will be able to breathe more easily about orders they have placed or would like to place.

Bellevue, Washington-based Paccar reported Q4 profits of $921 million, an increase of nearly 80% from the last three months of 2021. Net truck sales climbed to more than $7.7 billion from about $6.3 billion in the prior-year quarter as the company shipped 51,600 new trucks during the period, up from 47,600 in late 2021 and 44,300 in Q3.

Feight and Schippers are forecasting that Paccar will maintain its momentum and deliver between 49,000 to 53,000 trucks in the first quarter. Demand, they said, remains strong across the company’s global markets as truckers look to replace aging equipment and buy new parts for the vehicles they’re keeping. Schippers said he expects first-quarter growth in the high-margin parts division to be between 10% and 13%.

“We’re taking orders in the second half,” Feight said about the demand outlook. “They’re coming in nicely and it seems like it’ll fill in 2023 well.”

Another indicator of the Paccar executives’ confidence: They are planning to spend $360 million to $410 million on researching and developing clean diesel and hydrogen conversion engines as well as autonomous systems and other technologies. Last year, Paccar spent $341 million on those projects, so the midpoint of the 2023 guidance is an increase of 13%.

Shares of Paccar (Ticker: PCAR) jumped nearly 9% to about $111 on the earnings report and outlook. Over the past six months, they have now climbed nearly 30%, growing the company’s market capitalization to more than $38 billion.

About the Author

Geert De Lombaerde | Senior Editor

A native of Belgium, Geert De Lombaerde has more than two decades of business journalism experience and writes about markets and economic trends for Endeavor Business Media publications FleetOwner, Healthcare Innovation, IndustryWeek, Oil & Gas Journal and T&D World. With a degree in journalism from the University of Missouri, he began his reporting career at the Business Courier in Cincinnati and later was managing editor and editor of the Nashville Business Journal. Most recently, he oversaw the online and print products of the Nashville Post and reported primarily on Middle Tennessee’s finance sector as well as many of its publicly traded companies.