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Factors at Play Ahead of PACCAR's (PCAR) Q2 Earnings Release
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PACCAR (PCAR - Free Report) is slated to release second-quarter 2024 results on Jul 23, before market open. The Zacks Consensus Estimate for the to-be-reported quarter’s earnings per share and revenues is pegged at $2.14 and $8.33 billion, respectively.
For the second quarter of 2024, the consensus estimate for PACCAR’s earnings per share has remained unchanged over the last 60 days. Its bottom-line estimates imply a decline of 8% from the year-ago reported number. The Zacks Consensus Estimate for its quarterly revenues suggests a year-over-year decrease of 1.3%.
The trucking giant beat on earnings in each of the trailing four quarters, the average surprise being 12.3%.
Key Predictions
For the second quarter of 2024, PACCAR expects to deliver around 48,000 trucks, implying a decrease from 51,900 units delivered in the corresponding period of 2023. Our model estimates revenues from truck sales to decline around 4.5% amid lower year-over-year volumes. Pre-tax income from the Truck segment is likely to decline 10.8% year over year.
On the positive side, high truck utilization and increased average fleet age are expected to positively impact Parts’ results in the second quarter of 2024. Our projection for second-quarter revenues from Parts sales is pegged at $1.62 billion, indicating a rise of 4.6% year over year. We expect revenues from the Financial Services segment to be around $507.5 million, implying a rise of 15.4% year over year.
Investors should note that PACCAR’s high capex requirements to develop technologically advanced offerings are likely to continue. For 2024, the company targets investing $700-$750 million in capital projects, up from $698 million in 2023. It plans to spend $460-$500 million on R&D, higher than $411 million in 2023. While the company’s heavy investment in innovative products and technology is likely to buoy its long-term prospects, it may strain its near-term financials and cash flows.
Earnings Whispers
Our proven model does not conclusively predict an earnings beat for the trucking giant. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. This is not the case here.
Earnings ESP: PACCAR has an Earnings ESP of +1.17%. This is because the Most Accurate Estimate is pegged 3 cents higher than the Zacks Consensus Estimate. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: PCAR currently has a Zacks Rank #4 (Sell).
Stocks to Consider
While an earnings beat from PACCAR looks uncertain this season, here are a few players from the auto space, which, according to our model, have the right combination of elements to post an earnings beat for the quarter to be reported:
Allison Transmission (ALSN - Free Report) will release second-quarter 2024 results on Jul 25. The company has an Earnings ESP of +0.25% and a Zacks Rank #2.
The Zacks Consensus Estimate for Allison’s to-be-reported quarter’s earnings and revenues is pegged at $2.03 per share and $790 million, respectively. ALSN surpassed earnings estimates in the trailing four quarters, with the average surprise being 14.3%.
Oshkosh Corp (OSK - Free Report) will release second-quarter 2024 results on Jul 31. The company has an Earnings ESP of +1.97% and a Zacks Rank #3.
The Zacks Consensus Estimate for Oshkosh’s to-be-reported quarter’s earnings and revenues is pegged at $3 per share and $2.8 billion, respectively. OSK surpassed earnings estimates in the trailing four quarters, with the average surprise being 39%.
Cummins (CMI - Free Report) will release second-quarter 2024 results on Aug 1. The company has an Earnings ESP of +0.53% and a Zacks Rank #3.
The Zacks Consensus Estimate for Cummins’ to-be-reported quarter’s earnings and revenues is pegged at $4.85 per share and $8.3 billion, respectively. CMI surpassed earnings estimates once in the trailing four quarters and missed on the other three occasions, with the average negative surprise being 1.1%.
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Factors at Play Ahead of PACCAR's (PCAR) Q2 Earnings Release
PACCAR (PCAR - Free Report) is slated to release second-quarter 2024 results on Jul 23, before market open. The Zacks Consensus Estimate for the to-be-reported quarter’s earnings per share and revenues is pegged at $2.14 and $8.33 billion, respectively.
For the second quarter of 2024, the consensus estimate for PACCAR’s earnings per share has remained unchanged over the last 60 days. Its bottom-line estimates imply a decline of 8% from the year-ago reported number. The Zacks Consensus Estimate for its quarterly revenues suggests a year-over-year decrease of 1.3%.
The trucking giant beat on earnings in each of the trailing four quarters, the average surprise being 12.3%.
Key Predictions
For the second quarter of 2024, PACCAR expects to deliver around 48,000 trucks, implying a decrease from 51,900 units delivered in the corresponding period of 2023. Our model estimates revenues from truck sales to decline around 4.5% amid lower year-over-year volumes. Pre-tax income from the Truck segment is likely to decline 10.8% year over year.
On the positive side, high truck utilization and increased average fleet age are expected to positively impact Parts’ results in the second quarter of 2024. Our projection for second-quarter revenues from Parts sales is pegged at $1.62 billion, indicating a rise of 4.6% year over year. We expect revenues from the Financial Services segment to be around $507.5 million, implying a rise of 15.4% year over year.
Investors should note that PACCAR’s high capex requirements to develop technologically advanced offerings are likely to continue. For 2024, the company targets investing $700-$750 million in capital projects, up from $698 million in 2023. It plans to spend $460-$500 million on R&D, higher than $411 million in 2023. While the company’s heavy investment in innovative products and technology is likely to buoy its long-term prospects, it may strain its near-term financials and cash flows.
Earnings Whispers
Our proven model does not conclusively predict an earnings beat for the trucking giant. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. This is not the case here.
Earnings ESP: PACCAR has an Earnings ESP of +1.17%. This is because the Most Accurate Estimate is pegged 3 cents higher than the Zacks Consensus Estimate. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: PCAR currently has a Zacks Rank #4 (Sell).
Stocks to Consider
While an earnings beat from PACCAR looks uncertain this season, here are a few players from the auto space, which, according to our model, have the right combination of elements to post an earnings beat for the quarter to be reported:
Allison Transmission (ALSN - Free Report) will release second-quarter 2024 results on Jul 25. The company has an Earnings ESP of +0.25% and a Zacks Rank #2.
The Zacks Consensus Estimate for Allison’s to-be-reported quarter’s earnings and revenues is pegged at $2.03 per share and $790 million, respectively. ALSN surpassed earnings estimates in the trailing four quarters, with the average surprise being 14.3%.
Oshkosh Corp (OSK - Free Report) will release second-quarter 2024 results on Jul 31. The company has an Earnings ESP of +1.97% and a Zacks Rank #3.
The Zacks Consensus Estimate for Oshkosh’s to-be-reported quarter’s earnings and revenues is pegged at $3 per share and $2.8 billion, respectively. OSK surpassed earnings estimates in the trailing four quarters, with the average surprise being 39%.
Cummins (CMI - Free Report) will release second-quarter 2024 results on Aug 1. The company has an Earnings ESP of +0.53% and a Zacks Rank #3.
The Zacks Consensus Estimate for Cummins’ to-be-reported quarter’s earnings and revenues is pegged at $4.85 per share and $8.3 billion, respectively. CMI surpassed earnings estimates once in the trailing four quarters and missed on the other three occasions, with the average negative surprise being 1.1%.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.