Paccar Financial Services, the financial arm of truck manufacturer Paccar, is looking to expand operations after reporting year-over-year revenue growth in the second quarter.
“PFS achieved good first-half results due to its growing, high-quality portfolio,” said Paccar Vice President Todd Hubbard in the company’s Q2 earnings statement July 23. “The used-truck market has normalized after a period of high volume and prices.”
BIGGER PICTURE: PFS issued $1.71 billion of medium-term loans through the first half of 2024, which bodes well for a lending environment that’s been constrained by high interest rates since last year. With its heightened investment activity, PFS and its parent company reported the following for the second quarter:
- PFS revenue totaled $509.8 million, up from $439.8 million in Q2 2023.
- PFS earned $111.2 million in pretax income in Q2, a 23.2% decrease year over year.
- Paccar’s net income totaled $2.32 billion through the first half of 2024, compared with $1.96 billion over the same stretch in 2023.
- Paccar’s medium-duty market share reached 17.3% at midyear, up 4.5% YoY.
PFS manages a portfolio of 229,000 trucks and trailers, including a fleet of 41,000 vehicles from PacLease, the company’s North American and European truck leasing subsidiary. The company has $21.33 billion in total assets, according to the earnings statement.
“Paccar’s excellent 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,” said PFS President Craig Gryniewicz.
FUTURE LOOK: Amplify Cell Technologies, a joint venture of Paccar, Cummins, Daimler Truck and EVE Energy, started construction on its battery manufacturing plant in Mississippi in the second quarter. The facility, with an annual manufacturing capacity of 21 gigawatt hours, will make lithium-iron-phosphate battery cells, which are known for their durability and cost-effectiveness. Production is set to begin in 2027.
“This joint venture will produce state-of-the art batteries that are specifically designed for commercial-vehicle duty cycles,” Ken Hastings, Paccar director of investor relations, said in the earnings call.
MARKET OUTLOOK: Paccar shares (PCAR) on July 23 opened at $98.51 and closed at $97.10. Today, shares were down 0.66% from market open to $96.44 as of 11:56 a.m. EST. The company has a market cap of $50.4 billion. PACCAR Financial Services revenue up 16% YoY.
