PACCAR Financial Services, the finance arm of truck manufacturer PACCAR Inc., continued to grow its portfolio in the first quarter of 2023, driven by elevated prices and higher deliveries.
PACCAR Financial‘s revenue totaled $423.2 million in the first quarter of 2023, up 7.2% quarter over quarter and 15.6% year over year, according to the company’s earnings release. Outstandings totaled $17.9 billion, up 4.3% QoQ and 12% YoY.
“PACCAR Financial Services benefited in the first quarter from a larger portfolio, excellent portfolio quality and good used truck business,” PACCAR President and Chief Financial Officer Harrie Schippers said during the company’s earnings call. “PACCAR Financial’s 13 used-truck facilities worldwide contributed to higher price realization compared to wholesale channels, [while] used truck prices have moderated but remained historically strong.”
In 2022, PACCAR Financial financed 26% of all Kenworth, Peterbilt and DAF trucks, according to the company’s earnings presentation. The company has a portfolio of 220,000 trucks and trailers, including a fleet of 41,000 vehicles from PacLease, the company’s full-service truck leasing subsidiary in North America and Europe, according to the company’s earnings release. PACCAR Financial’s quarterly pretax income in Q1 clocked in at a record $148.8 million, an increase of 1.2% YoY.
“PACCAR’s strong balance sheet, complemented by its A+/A1 credit ratings, enables PFS to offer competitive retail financing to Kenworth, Peterbilt and DAF dealers and customers in 26 countries on four continents,” Craig Gryniewicz, PACCAR Financial Corp. president, said in the company’s earnings release. “PACCAR Financial Services has excellent access to the debt markets, issuing $800 million in medium-term notes during the first quarter of 2023.”
Strong freight market, customer demand drive sales
Bellevue, Wash.-based PACCAR designs and manufactures trucks for its Kenworth, Peterbilt and DAF brands, as well as advanced power trains. The company also provides financial services and information technology and distributes truck parts through various subsidiaries.
PACCAR delivered 26,000 trucks in the United States and Canada during Q1, up 25.6% YoY, while PACCAR delivered 51,100 vehicles worldwide in Q1, up 18.8% YoY.
“Good freight markets and strong customer demand are driving the resilient truck market in North America,” said Darrin Siver, PACCAR executive vice president.
U.S. and Canada Class 8 truck industry retail sales are estimated between 280,000 and 320,000 trucks in 2023, according to PACCAR’s earnings release. Despite the positive estimates, some supply chain concerns persist, particularly on the supplier side, Chief Executive Preston Feight said during the call.
“In the first quarter, the supply base is not fully improved, so there’s still our costs and things that we experienced in terms of deliveries,” Feight said. “In fact, there were some trucks that we didn’t finish delivering, so we had better absorption in the first quarter than we might see in the second quarter.”
Shares of PACCAR Inc. [Nasdaq: PCAR] were trading at $74.80 at market close today, down 1.4% or $1.03 from market open. PACCAR has a market capitalization of $39.09 billion.