管理層發言
Good morning, and welcome to PACCAR's Second Quarter 2026 Earnings Conference Call. Today's call is being recorded. And if anyone has an objection, they should disconnect at this time. I would now like to introduce Mr. Ken Hastings, PACCAR's director of investor relations. Mr. Hastings, please go ahead.
Good morning, and welcome to PACCAR's second quarter 2026 Earnings Conference Call. My name is Ken Hastings, PACCAR's director of investor relations. Joining me this morning are R. Preston Feight, Chief Executive Officer; Kevin D. Baney, President; and Brice J. Poplawski, Senior Vice President and Chief Financial Officer. Certain information presented today will be forward-looking and involve risks and uncertainties that may affect expected results. For additional information, please see our SEC filings and the Investor Relations page of paccar.com. I would now like to introduce Preston Feight.
Thanks, Ken. Good morning, everyone. In the second quarter, PACCAR's outstanding employees did an excellent job of increasing production to provide our customers with the highest quality trucks and transportation solutions in the industry. Their hard work, high performance, and dedication is enabling PACCAR to continue increasing build rates in our factories around the world. PACCAR's second quarter revenues were $7.5 billion and net income was $752 million, an increase of 24% from the first quarter. These results were driven by strong truck division performance. PACCAR Parts performed well and achieved record quarterly revenues of $1.75 billion and quarterly pre-tax income of $417 million. PACCAR Financial also performed well, achieving pre-tax income of $124 million. Now looking at this year's U.S. and Canadian heavy truck market, the U.S. economy is growing, and the truck market is strengthening. Freight rates have increased and regulatory clarity has been provided. First half retail sales were 105,000 trucks, and we expect that the second half could be around 145,000, resulting in a full year market size of around 250,000 units. In Europe, the economy is growing modestly, and the truck market is healthy. We project the 2026 European above 16-ton market size to be around 310,000 trucks. DAF's premium trucks are providing customers with the latest technology and best operating efficiency. This year's South American above 16-ton market, where DAF trucks are desired by customers for their durability and advanced technology, is expected to be in the range of 100,000 to 110,000 vehicles. In the second quarter, PACCAR's truck deliveries increased from 33,000 to 38,700. Third quarter deliveries are estimated to grow and be around 42,000 as build rate increases are partially offset by the normal European summer shutdown period. PACCAR Parts other second quarter gross margins increased from 13.1% to 14.4% due to very good overall performance. Third quarter margins are forecast to be a strong 14.5% and then further increase in the fourth quarter. PACCAR's exceptional range of trucks, compelling parts business, industry-leading financial services, and customer-focused product development strategy position the company well for an excellent second half of 2026 and the future. Kevin will now provide an update on PACCAR Parts, financial services, and other business highlights. Kevin?
Thank you, Preston. PACCAR Parts achieved record second quarter revenues of $1.75 billion and good pre-tax profits of $417 million. Gross margins increased to 29.8%. Increasing truck utilization is beginning to lead to more parts and service activity, and we expect higher parts sales growth in the second half. Revenue from PACCAR Parts fleet services program grew 8% in the second quarter, which is an indicator customers are beginning to increase parts purchases. For the full year, we estimate parts sales growth in the range of 3% to 5%. PACCAR Financial Services pre-tax income was a robust $124 million. Their high performance is a result of steady finance margins and strengthening used truck markets. Earlier this month, the EPA clarified a key NOx-related emissions regulation. The clarification extends the timeline to introduce 35-milligram NOx engines. Next year, customers will be able to buy the current generation of engines with an associated nonconformance penalty. This will be beneficial for customers as it will ensure that new technology is fully validated before being purchased by customers. It is also likely to have a positive impact on the size and strength of next year's truck market. This year, PACCAR is planning capital investments in the range of $700 million to $750 million, and R&D expenditures in the range of $450 million to $480 million. PACCAR is investing in customer-focused technology and innovation projects including advanced flexible manufacturing that enhances efficient local-for-local production, the development of next generation clean diesel engines, industry-leading hybrid and electric powertrains, and integrated vehicle and connected vehicle services. We are looking forward to the success that our customers, dealers, and PACCAR will experience in the coming quarters and years. We are now pleased to answer your questions.
分析師問答
Thank you. We will now begin the question-and-answer session. If you would like to ask a question, please press one on your telephone keypad. To withdraw your question, press one again. We ask that you pick up your handset when asking a question and if you are muted locally, please remember to unmute your device. Please stand by while we compile the Q&A roster. Your first question comes from the line of Stephen Volkmann from Jefferies. Steven, your line is open. Please go ahead.
Thank you. Good morning, everyone. I am wondering if we can dive in on gross margins. I think this quarter came in a bit stronger than you had expected. What are the moving parts that would explain that?
Sure. There are a couple of things. Probably one of the things is volume of trucks was higher. Most significantly, our local production is benefiting PACCAR. I also think the team did a great job in cost controls; price versus cost was favorable for us, even more than we thought it would be, so that was also a positive. Those are the biggest factors that influenced it. As I said, local-for-local production provides some tariff benefits to us. You bet. Have a great day, Steven.
Okay. Great. And what are you seeing in the market relative to price? Because you have a little bit more local-for-local than some of your competitors. Are you seeing overall pricing coming up in the market, giving you some opportunity?
Yeah. I think what is happening in the general market is our customers are starting to experience better operating conditions for themselves. Spot rates are up 20%. Contract rates were up 6.5%, so we are seeing favorability for how they are operating their businesses. I think the driver pool has become a little bit more constrained, which is helping them realize operating benefits. And I think we all share in that together. So we have seen some favorability in terms of how we are able to price trucks as we look forward.
Next question comes from the line of Jerry David Revich from Wells Fargo. Please go ahead.
Yes. Hi, good morning. I thought the profit per truck performance was especially strong in the quarter. I am wondering, was there any EPA refund benefit or anything along those lines that contributed to the really strong cost improvement?
You know, I think if you look at that performance, it was largely driven by a net price-cost benefit. The biggest part of that was really the team's operating effectiveness and good warranty performance by the team. There were efficiencies due to the local-for-local production. We did have a net tariff benefit. We had some tariffs we have to pay with raw materials, and then we had some offset tariffs. The net was favorable, but the larger part of the improvement was really operating strength.
Thank you for the color. Is it possible just to quantify the refund that you saw in the quarter to put a finer point on the run rate profits per truck?
We did not put that out, and we think that it will remain strong. So we think that the tariff position we had in the second quarter will look similar to the third quarter.
And then what we had been hearing until the EPA's new ruling was that for the fourth quarter deliveries there were pulled back discounts and so the price realization was set to improve by over $5,000 in the fourth quarter versus the third quarter. Can you update us—is that still happening considering the more phased approach to the EPA 2027 rollout?
I think the EPA has done a very nice job in paying attention to what the industry's needs are. I appreciate the work the administration has done in helping make sure we put fully validated products out into the marketplace. It has been nice to work with the ATA, the customers, and the administration to put a government-industry relationship in place that is working well. They smoothed the prebuy, and I think it creates a stronger position for 2027 to be a good market for the industry. If it is a good market for our customers, then it tends to be a good market for us as well.
Your next question comes from the line of Tami Zakaria from JPMorgan. Please go ahead.
Hey. Good morning. Congrats on the excellent results. Two questions. The first one is on the gross margin guide for the third quarter. It seems like you are expecting somewhat sequentially flattish gross margin despite deliveries being higher and North America probably being higher mix, given the shutdowns in Europe. So what underpins that margin guide? Why would margins not be better sequentially? Is there any cost headwind you are expecting in this third quarter that you did not have in the second quarter? My second question is on the NOx-compliant engines. If I remember correctly, you expected that to be around $8,000 to $10,000 more expensive than the noncompliant one, but with the NCPs that have been announced, it seems like the fine could be lower than the cost of a compliant engine. Just wanted to know if that is how you interpret it, and if so, how could that impact your customer behavior next year when the EPA NOx regulation goes into effect?
Great question, Tami. There are a couple of factors. One is as truck volumes increase, there is a mix impact with parts; that increase affects the overall margin ratio, which is why we forecast around 14%. Additionally, the mix of trucks we are building in the third quarter is shifting a little bit—maybe a little less vocational and a little more fleet trucks. Those two things together help explain the guide. With higher build, we see profit increasing in the quarter and continuing to strengthen through the year. Regarding the EPA, a lot of information came out as recently as July 9 when the EPA made the announcement. It is still preliminary—a notice of proposed rulemaking with a comment period—so things could change. We probably will not get a final answer until later in the year. As currently proposed, we would expect to see NCPs running at something like the $6,000 to $7,000 range per truck. The cost of fully compliant 35-milligram engines would likely be higher than that. A big part of the discussion was the desire to make sure engines are fully validated and customers have enough time with them. The result should improve the market at the end of the year and bode well for a good 2027 operating condition for customers and for us.
Got it. That is helpful.
Great. Your next question comes from the line of Rob Wertheimer from Melius Research. Please go ahead.
Thank you. Preston, you just touched on this. I think maybe Kevin did earlier, but the EPA shift or closed rule may benefit 2027 a bit. When you talk to customers now, are people prebuying, or do they just need trucks? There are a couple of things that may have tightened up fleet dynamics, so I am curious about what people are buying for, and whether those comments around a continued prebuy or more confidence in the engine meaning they are not shying away from it.
Good question. Many customers have been in a tough operating condition for a few years and have been careful with capital, keeping trucks longer than they would have wanted. That showed up in the first half with 105,000 retail. Now they are trying to get back into their normal operating models. The trucks we are building today are the most fuel-efficient trucks we have ever built and are very helpful to customers. The driver environment is the best it has been, and engines are performing well. Since customers are starting to have the operating capital to use, they want to use those trucks, and it seems like demand will ramp through the second half—probably around 145,000 retail in the second half. We should expect a very healthy market in 2027.
And then just the EPA—does that advantage any of your competitors more through sort of credits? Is that any headwind to market share or price in 2027?
Actually, the situation is kind of leveling and maybe to our advantage a little bit. The NCPs allow everybody to make sure we get the right products out there validated so customers get the experience with the products. If engines are qualified at today's level, the fines are going to be in that $6,000 to $7,000 range if manufacturers choose to offer today's products. That levels it out.
Your next question comes from the line of David Raso from Evercore ISI. Please go ahead.
Hi. Thank you. Your comments about 2027—can you take us through your thoughts right now when you are speaking to your suppliers about the cadence Q4 into Q1? And then second question on the parts business: can you help us get a little more comfort with the parts growth exiting 2026? Obviously, the back half of the year has to step up a little bit. Just trying to think that through as we look into 2027.
Thanks, David. I will take the first one, then Kevin can cover the parts one. The quarterly cadence of the market is, as I described earlier, ramping up. We are certainly full through the third quarter and mostly full for the year—probably around 90% full for the year—even as we ramp up production at a rate that is reasonable. That is limiting market size a bit right now. We will likely sell out of build slots in the next month or two, and as we are out of build slots there will be carryover into 2027. Because of the way the EPA implemented this approach, it will allow people to have the product they want next year, which should help the cadence of 2027 start strong and be strong through the year.
Just to add to what Preston said, PACCAR was the first to announce build rate increases earlier in the year, and we've had strong communication with the supply base on the rate of increase throughout the year. We feel pretty good about the support we are getting at the elevated build levels. On the parts side, parts will grow at a faster rate in the second half based on the strength of the truck market. Capacity has come out, utilization has increased, and freight rates have increased. We are seeing customers buying more parts now. A good indicator is that larger customers are buying through our fleet services program; we have seen an 8% increase quarter over quarter. Europe is also running strong. As we see the stronger truck market in the second half of this year and into next year, we are confident with parts growth.
Your next question comes from the line of Chad Dillard from Bernstein. Please go ahead.
Hi, good afternoon. I have a question on EPA 2027. So noncompliance is about $6,000 to $7,000, and to comply with 35 milligrams is plus $10,000. Assuming the EPA rules hold, how does that change your product strategy? Will you stick with the 200-milligram product and just pass that extra cost on to customers, or are you planning to go ahead as planned with the 35-milligram product?
We are planning on selling the current product to our customers initially. That is the engagement we've had with many customers; that is their preferred approach to ease into this. For both PACCAR engines and our partner engines like Cummins, the plan is to begin 2027 selling those engines and then getting customers experience with the 35-milligram engines as the year progresses. As you noted, if numbers stay where they are—$6,000 to $7,000—there is still an advantage for customers in taking the current product. That is how we think the year shapes up and it feels favorable for the industry.
Okay. Great. And second question, coming back to tariffs and just to be clear, was there anything in 2Q related to an EPA refund or tariffs that will carry through the rest of the year? And then assuming rules stay where they are today, how do we think about the year-on-year bridge to 2027 for tariffs?
The tariff situation has become a little bit more clear and what is in place appears durable. It seems favorable for PACCAR. Our teams have been active across our factories, and it's great to see people building every model of truck in our U.S. factories in a way that supports local-for-local production. That gives us a stable tariff operating environment. There was a bit of benefit in Q2, and that will carry forward into Q3. The bigger effect of tariffs really ends up being Section 232 as you look forward into next year.
Your next question comes from the line of Kyle Menges from Citi. Please go ahead.
Great. Thanks. I was hoping if we could hone in on margins a little bit as we get into 2027. You sound a bit more confident in volumes and easing into the new engine platform. How are you thinking about margin ramifications as you start by selling the 2026 engines in the first half of next year and then start to produce on the new engines? How should we think about margin impact as you do that?
The NCPs that will be out there are fees paid to the government, so that is a straight pass-through for us and should not have any effect on margin. We are not going to try to make a profit on those penalties. We think the strength of the market will be good for PACCAR in 2027. The allowance to sell the current model of products throughout next year provides a favorable approach and should be positive.
Got it. Also on parts, it sounds like some of the larger fleet customers are contributing more to parts demand this year. As the over-the-road market comes back and recovery becomes more broad-based, and you see more demand pickup from small and midsized fleets, how should we think about parts margins as that mix shifts? I would imagine small and midsize fleets buy more TRP parts, which may come at a lower margin. Thoughts?
The fleet services reference was a good indicator for large fleets, but we are also seeing increases in small to midsize fleets as utilization picks up across the industry. We are seeing an increase in TRP parts sales as well. We continue to have the newest truck platforms in the industry with strong proprietary content, including the engine business. With focus on service-only required maintenance and the service side, as the truck market improves we expect continued improvement in parts sales and indications on parts margins.
Your next question comes from the line of Jamie Lyn Cook from Truist Securities. Please go ahead.
Hi, good morning, thanks for your time, and congrats on a nice quarter. My first question: deliveries surprised to the upside relative to guide, but U.S. and Canada was down, which surprised me. I thought you implied every region should be up. So what is driving that? Within the 42,000 deliveries in the third quarter, what are you expecting for U.S. and Canada? Also, Preston, it dovetails into margins because margins were very impressive with U.S. and Canada down. I thought that was one of your more profitable regions. And then my second question: on the third quarter margins you mentioned mix—like a little more fleet, a little less vocational. Can you help us understand what you are seeing across TL, LTL, and vocational in terms of the order book? Is fleet being higher just a function of demand improving there? Is there something more negative happening on the vocational side?
That was a lot, Jamie. Let me start at the back. There is some mix shift, largely because fleets and truckload carriers are increasing demand in the months we are in now and looking forward, and that probably is the biggest thing affecting the margin guide. We did have a few hundred trucks that we did not deliver in the U.S. due to some supplier constraints that we are starting to experience as the market ramps up. We think those will come through in the quarter and we do expect healthy delivery improvement in the U.S. market. We had good European performance; the team did a great job there in the quarter. Put together—the strong U.S. build, increasing U.S. truck market, and strong European performance—they all came together well and we think that will continue.
Your next question comes from the line of Steven Fisher from UBS. Please go ahead.
Thanks. Good morning. On the U.S./Canada retail outlook, you are centering around 250,000. With half the year to go, why not narrow the range at all? Are there still scenarios where you could reasonably say either 230,000 or 270,000? Also, on the parts side relative to the new 3% to 5% range for the year, are we thinking Q3 will be at the low end or somewhere between? Anything specific on Q3 guide for parts?
We left it that way, but we are really calling a midpoint at 250,000. The uncertainty still centers around inventory and what happens with inventory. We have a great understanding of what build is going to be; now it is just what happens with inventory.
Makes sense. On the parts side, you gave the 3% to 5% range for the year. Are you thinking Q3 will be at the low end of that range or somewhere between?
We did not provide a specific Q3 guide, but we did see sequential growth in Q2 as we went through the quarter, which is why we called the 3% to 5% for the second half. We expect growth to continue through the back half of the year.
I do not think it is at the low side of that range; we think it is at the higher side.
Your next question comes from the line of Angel Castillo from Morgan Stanley. Please go ahead.
Hi. Good afternoon. Preston, I wanted to go back to the discussion around EPA 2027. Some of the NCPs allow the ability to use credits to sell or to offset. Could that create the ability for some competitors to ultimately sell the current engine at no incremental penalty? If so, what are the implications for passing through price next year on the new engine or competitive dynamics on price?
Angel, I do not tend to want to speculate about competitor strategies. From what we can see in the public qualifications, if engines are qualified at today's level, the penalties are in that $6,000 to $7,000 range for most manufacturers.
And, of course, people can. Please hold. We are experiencing technical difficulties. Please stand by while we address the issue. Test, can you hear? Jade, can you hear us? David, can you hear us? We can hear you all. Yes. Thank you all for standing by. We will now resume the broadcast.
So, Angel, if you are still there, I hope you could hear the answer. If not, let me know and we will come through it. Jade, why don't we go to the next question? Angel can get back in queue if he wants to do that again.
Can you hear me? Yep. Hey, Ken. Go ahead. Oh, perfect. Alright. Thank you. Switching gears a little bit: I noticed one of your partners launched a second-generation hardware for driverless freight routes with another OEM partner. Can you give an update on how partnerships with Aurora are progressing, how you see that evolving over time, and any plans to start approving driverless operations or what your strategic approach will be on autonomous innovations?
PACCAR is developing its autonomous vehicle platform and we are pleased with the progress. We have good partners in Aurora, Stack AV, Kodiak, and others we work with. We feel good about the progress and the significance of it. We have no plans to take the driver out at this point in time.
Your next question comes from the line of Scott Group from Wolfe Research. Please go ahead.
Hey, thanks. Afternoon. We keep hearing from truckers that this is a supply-driven cycle—rates are going up a lot, but demand is stable and there are fewer drivers. Does that change how you think about an upcycle in terms of where orders and builds can go? Are you hearing about fleet growth or do you think that is less likely now, and is it more supply-driven tightening?
Great question. While the freight tonnage index is increasing only modestly, it is at a high level. With U.S. GDP growth, which drives over 70% of freight moved by trucks, that is positive for trucks. Reshoring and local-for-local efforts in the industrial base are good for trucks and especially for PACCAR. All of those things give us confidence in where the market should head in the coming year or two.
Mechanically, if someone placed an order that near-term was a prebuy for delivery in 2026, are they able to now push that to 2027? Are you seeing that? And longer-term, as we enter an upcycle, where do you think gross margins can get to relative to prior cycles?
Many expected a huge prebuy at the end of the year, but with the EPA's approach we now expect a continued improved cycle through the balance of the year with a stronger 2027 and not much drop-off. That feels positive. On margins longer-term, we've invested in the right products so we can produce the best trucks and in the right locations, which is positive for margin. We feel good about the company's short-, mid-, and long-term performance.
At this time, there are no further questions in the queue. Are there any additional remarks from the company?
We would like to thank everyone for joining the call, and thank you, operator.
Thank you as well. Ladies and gentlemen, this concludes PACCAR's earnings call. Thank you for participating. You may now disconnect.