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

PACCAR Inc.’s (NASDAQ: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.

Guidance

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 (NYSE:LEA) , Magna International, Inc. (NYSE:MGA) and Navistar International Corporation (NYSE: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%.

Today's Stocks from Zacks' Hottest Strategies

It's hard to believe, even for us at Zacks. But while the market gained +18.8% from 2016 - Q1 2017, our top stock-picking screens have returned +157.0%, +128.0%, +97.8%, +94.7%, and +90.2% respectively.

And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - Q1 2017, the composite yearly average gain for these strategies has beaten the market more than 11X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.

See Them Free>>