- E-commerce, housing, construction and foreign markets helped Paccar increase market share and grow its revenue and net income from Q2 to Q3, the company reported on Tuesday. Paccar Parts seized on the trend, as a seller, putting its offerings online and picking up new business, said Preston Feight, Paccar CEO, during a Q3 earnings call.
- Municipal and local government budgets have been hit hard by the pandemic, an analyst told Feight on the call, possibly affecting construction projects. But Feight said he has not detected a major threat to its related trucking lines for construction and industrial work, beyond what the OEMs lost during the shutdowns in the spring.
- Paccar, which manufactures the Kenworth, Peterbilt and DAF brands, raised its North American market share during the nine months ended Sept. 30, to 29.7%, up from 29.2% for the same period in 2019, according to Feight. In Brazil, DAF heavy-duty market share rose to a record 9.3% for the first nine months of 2020, Feight said.
The COVID-19 pandemic slowed Paccar's production and depressed profits, although the company still made $385.5 million in net income in Q3.
Feight said Paccar has managed to juggle multiple projects, from research into electric trucks and innovation to expanding market share in North America and South America. In early Q4, Paccar announced the launch of Kenworth's first battery-electric Class 8 model, which enters production next year and has an estimated range of 150 miles.
The company also benefited from aftermarket parts revenue. In the past, Paccar Parts has been a significant source of profitability for the OEM. In Q1, Paccar reported its parts division set a record in profit.
Then came the COVID-19 pandemic in March, which hit Paccar hardest in Q2. Paccar reported a 58% drop in revenue as truck production was shut down for five weeks. The pandemic caused Paccar to take a hit in Q3 too. Globally, the company delivered 36,000 new trucks in the quarter ended Sept. 30, down from 49,300 for the same period in 2019. In the first nine months of 2020, Paccar delivered 92,500, down from the 153,100 trucks it delivered in the same period in 2019.
But Paccar sees 2020 sales rebounding. Paccar noted that September's orders were 18% higher than September 2019.
The company is not back to pre-pandemic business yet. Revenue dropped 24.4% YoY for Q3. And Q3 net income was $385.5 million, down 37% YoY.