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PACCAR (PCAR) Q3 Earnings Drive Past Estimates, Grow Y/Y

PACCAR Inc.’s PCAR third-quarter 2017 earnings were $1.14 per share, up from 98 cents recorded in the year-ago quarter. Earnings surpassed the Zacks Consensus Estimate of $1.09. Results benefited from a strong European market, increasing market share in North America and global higher market sales.

Net sales and financial services revenues increased to $5.06 billion from $4.25 billion recorded in third-quarter 2016.

PACCAR Inc. Price, Consensus and EPS Surprise

Segment Results

Revenues from the Truck, Parts and Other segment increased to $4.73 billion in third-quarter 2017 from $3.95 billion in third-quarter of 2016. The segment’s pre-tax income increased to $501.6 million in comparison to $415.4 million, recorded a year ago.

Revenues in the Financial Services segment (comprising a portfolio of 184,000 trucks and trailers with total assets of $13.06 billion) rose to $328.2 million, from $296.2 million. Pre-tax income in the segment increased to $71.2 million from $71 million in the year-ago quarter.

Financial Position

PACCAR’s cash and marketable debt securities amounted to $3.4 billion as of Sep 30, 2017 compared with $2.9 billion as of Dec 31, 2016.


The company increased the Class 8 industry retail sales estimates in the United States and Canada to be within 210,000-220,000 compared with the previous expectation of 200,000-220,000 vehicles for 2017.

Also, for 2018, the company expects the Class 8 truck industry retail sales estimates for the United States and Canada to be within the range of 220,000-250,000 vehicles.

Zacks Rank & Other Key Picks

PACCAR currently carries a Zacks Rank #2 (Buy).

Some other companies worth considering in the auto space are Lear Corporation LEA, Magna International, Inc. MGA and Navistar International Corporation NAV. Lear sports a Zack Rank #1(Strong Buy), whereas both Magna International and Navistar carry a Zacks Rank of 2 as well. You can see the complete list of today’s Zacks #1 Rank stocks here.

Lear has an expected long-term growth rate of 7.1%.

Magna International has an expected long-term growth rate of 9.5%.

Navistar has an expected long-term growth rate of 5%.

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