Released on October 24, 2023, PACCAR Inc (PCAR, Financial)'s earnings report for the third quarter of 2023 shows a record net income of $1.23 billion, a 60% increase from the $769 million earned in the same period last year. The company's third-quarter revenues were $8.70 billion, 23% higher than the $7.06 billion reported in the third quarter of 2022.
Financial Highlights
For the first nine months of 2023, PACCAR reported net income of $3.18 billion, including a $446.4 million after-tax, non-recurring charge related to civil litigation in Europe. Excluding this charge, the company earned adjusted net income of $3.63 billion. Net sales and financial services revenues for the first nine months of 2023 were $26.05 billion, compared to $20.69 billion achieved last year.
The company's Board of Directors declared a regular quarterly cash dividend of twenty-seven cents ($.27) per share, payable on December 6, 2023, to stockholders of record at the close of business on November 15, 2023.
Performance Analysis
PACCAR's strong performance in Q3 2023 is attributed to excellent Truck, Parts and Other gross margins of 19.5% and strong PACCAR Parts profits. The company's investments in innovative new DAF, Kenworth and Peterbilt trucks and enhanced manufacturing efficiency have been beneficial to truck owners' operating performance and have delivered strong financial results.
PACCAR Parts' excellent performance is the result of providing industry-leading technology that enhances customer uptime. PACCAR Financial Services achieved strong results due to its high-quality portfolio.
Future Outlook
PACCAR is increasing its investment in fuel-efficient diesel and electric powertrain technologies, autonomous systems, connected vehicle services, and next-generation manufacturing and parts distribution capabilities. The company estimates that it will invest $675-$725 million in capital projects and $470-$520 million in research and development expenses in 2024.
PACCAR, Cummins, Daimler Truck and EVE Energy are partnering to create state-of-the-art commercial vehicle battery cell production in the United States, expecting growing demand for zero emissions vehicles throughout the decade. The total investment is expected to be in the range of $2-$3 billion for the 21-gigawatt hour (GWh) factory.
