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PACCAR (PCAR) Q2 Earnings & Sales Beat Estimates, Down Y/Y

PACCAR Inc. PCAR has reported earnings of 43 cents per share for second-quarter 2020, beating the Zacks Consensus Estimate of 31 cents, mainly on higher pre-tax income from the company’s trucks, parts and others, and financial service units. However, the reported figure comes in lower than the prior-year quarter’s $1.78.

Consolidated revenues (including trucks and financial services) came in at $3.06 billion, surpassing the Zacks Consensus Estimate of $2.93 billion. The top-line figure, however, comes in lower than the year-ago quarter’s $6.63 billion.

During the reported quarter, the company recorded total pre-tax income of $184 million, marking a decline from the prior-year quarter’s $814.4 million. The company’s net income fell to $147.7 million from the $619.7 million reported in second-quarter 2019.

SG&A expenses during second-quarter 2020 plunged 30.6% to $120.2 million from the $173.3 million incurred in second-quarter 2019. R&D expenses declined 19.4% to $66.5 million during the June-end quarter from the year-earlier quarter’s $82.5 million.

PACCAR Inc. Price, Consensus and EPS Surprise

Segmental Performance

Revenues from trucks, parts and others totaled $2.7 billion in the second quarter, down from the prior-year quarter’s $6.27 billion. The segment’s pre-tax income significantly decreased to $119.5 million from the $712.3 million recorded in the year-ago period. However, the figure surpassed the Zacks Consensus Estimate of $53 million.

Revenues in the financial services segment decreased to $360.3 million from the year-earlier quarter’s $361.4 million. Pre-tax income declined to $55.5 million from the $80.3 million reported in the year-ago quarter. However, the figure outpaced the Zacks Consensus Estimate of $38.66 million.

Dividends & Cash Position

During second-quarter 2020, PACCAR announced a regular quarterly cash dividend of 32 cents per share, payable on Sep 1, to stockholders of record as of Aug 11, 2020.

PACCAR’s cash and marketable debt securities amounted to $4.2 billion as of Jun 30, 2020, compared with $5.2 billion as of Dec 31, 2019.

Outlook

The company has reiterated its capex and R&D expenses projection for the ongoing year. Capex is now projected at $525-$575 million, and R&D expenses are estimated in the $265-$295 million band.

Zacks Rank & Stocks to Consider

PACCAR currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks are Sonic Automotive, Inc. SAH, Niu Technologies NIU and LCI Industries LCII. While Sonic flaunts a Zack Rank of 1 (Strong Buy), Niu and LCI Industries carry a Zack Rank of 2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Shares of Sonic have rallied 23.8%, year to date, compared with the industry’s rise of 18.4%.

Shares of Niu have surged 129%, year to date, as against the industry’s decline of 8.8%.

Shares of LCI Industries have appreciated 11.6%, year to date, as against the industry’s decline of 8.8%.

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