Paccar Financial Services, the financial arm of truck manufacturer Paccar, saw revenues increase during the first quarter as portfolio quality improved despite a decline in sales.
Paccar Financial Services’ (PFS) revenues and financial services assets grew as credit quality improved, opening the door for strong financial services profitability amid declining sales, President and Chief Financial Officer Harrie Schippers said during the company’s earnings call today.
“This reflects solid portfolio growth and continued strong credit quality,” he said. “Similar to Paccar parts, Paccar Financial provides steady profitability during all phases of the business cycle in 2025.”
Bigger Picture
PFS issued $695 million in medium-term loans in the first quarter, as access to debt markets remains strong for the transportation lender. PFS and its parent company also reported:
- PFS revenue totaled $528 million in Q1, up 3.7% year over year;
- PFS earned $121.1 million in pretax income in Q1, an 6.3% increase YoY;
- PFS provision for losses on receivables increased to $18.3 million in Q1, up 13.7% YoY.
- Paccar’s financial services assets were $22.7 billion, up 7.5% YoY.
- Paccar’s net sales and revenues totaled $6.9 billion in Q1, down 16% YoY; and
- Paccar’s net income finished at $505.1 million for Q1, down 57.7% YoY.
Noteworthy
PFS manages a portfolio of 235,000 trucks and trailers, including a fleet of 40,000 vehicles from PacLease, the company’s North American and European truck leasing subsidiary, according to the earnings release.
Meanwhile, Paccar continues to expand its global efforts in the used truck market, Schippers said during the call.
“Paccar Financial operates working used truck centers around the world to support the sale of premium Kenworth, Peterbilt and DAF used trucks, and is building a new used-truck center in Warsaw, Poland, this year,” he said. “Used truck demand and pricing improved in the first quarter, and we expect it to further improve throughout the year.”
TARIFFS: Paccar also continues to navigate the uncertainty around tariffs and how the manufacturer is going to price tariffs into its products, Paccar CEO Preston Freight said during the earnings call.
“Life isn’t quite that straightforward because we’ll also be pricing those tariffs into our customers’ trucks as we go along. But we do have the backlog that we have to manage, and we can’t just pass that along as we have relationships with people,” he said. “We’ll be adjusting our pricing to match the tariffs, but it takes some time to do that or, as we mentioned, the tariffs might change, and that would reduce the need to make those adjustments.”
MARKET OUTLOOK: Shares of Paccar Inc. [Nasdaq: PCAR] were trading at $90.29 at market close today, down 1.90% or $1.75 from market open. Paccar has a market capitalization of $48.31 billion.
The third annual Equipment Finance Connect at the JW Marriott Nashville on May 14-15, 2025, is the only event for both equipment dealers and finance providers. Learn more and register here.
