PACCAR Inc (PCAR) Earnings
PACCAR Inc is expected to report next earnings on October 27, 2026 (in NaN days), with a consensus EPS estimate of $1.61. PCAR has beaten EPS estimates in 7 of its last 12 reported quarters (average surprise +0.6% over the last four).
| Report date | EPS est | EPS actual | Surprise | Revenue | Rev. surprise |
|---|---|---|---|---|---|
| Jul 28, 2026 | $1.36 | $1.43 | +5.1% | $7.0B | -0.8% |
| Apr 28, 2026 | $1.15 | $1.15 | +0.0% | $6.2B | -3.2% |
| Jan 27, 2026 | $1.06 | $1.06 | +0.0% | $6.8B | +12.7% |
| Oct 21, 2025 | $1.15 | $1.12 | -2.6% | $6.7B | +11.1% |
| Jul 22, 2025 | $1.29 | $1.37 | +6.2% | $7.5B | +7.4% |
| Jan 28, 2025 | $1.70 | $1.66 | -2.4% | $7.9B | +4.2% |
| Oct 22, 2024 | $1.82 | $1.85 | +1.6% | $8.2B | +7.6% |
| Jul 23, 2024 | $2.14 | $2.13 | -0.5% | $8.8B | +6.1% |
| Apr 30, 2024 | $2.20 | $2.27 | +3.2% | $8.7B | +6.0% |
| Jan 23, 2024 | $2.22 | $2.70 | +21.6% | $9.1B | +8.8% |
| Jul 25, 2023 | $2.18 | $2.33 | +6.9% | $8.9B | +7.9% |
| Jan 24, 2023 | $1.47 | $1.76 | +19.7% | $8.1B | +13.8% |
Source: company filings + earnings calendar. For informational purposes only — not investment advice.
Earnings call summary
Q2 FY2026 · July 28, 2026
AI summary of management’s prepared remarks and analyst Q&A. For informational purposes only — not investment advice.
Management highlights
- Overall Operational Performance - PACCAR increased production build rates across global factories in Q2 2026, supported by strong employee performance, enabling higher deliveries than the prior quarter. - The company's local-for-local production strategy provided tariff benefits and improved overall cost efficiency. - Strong cost control and favorable net price-cost dynamics drove better-than-expected gross margin expansion in Q2. - Market Condition Updates - The U.S. and Canadian heavy truck market is strengthening, driven by a growing U.S. economy, increased freight rates, and new regulatory clarity from the EPA. - The European heavy truck (above 16 ton) market is healthy amid modest economic growth. The South American above 16 ton market also remains solid, with strong demand for PACCAR's premium DAF trucks. - Truck utilization across markets is increasing, which is driving higher demand for parts and service activity. - Regulatory Update - The EPA issued a clarification that extends the timeline to introduce 35 milligram NOx emissions compliant engines, allowing sale of current-generation engines with a non-conformance fee (NCP) in 2027, which will enable full technology validation before full market introduction.
Guidance
- Full-year 2026 U.S. and Canadian heavy truck retail sales are projected to reach ~250,000 units, with 145,000 units expected in the second half following 105,000 units in the first half. - The 2026 European above 16 ton heavy truck market is projected to reach ~310,000 units, and the South American above 16 ton market is projected to reach 100,000 to 110,000 units. - Q3 2026 truck deliveries are estimated to grow to ~42,000 units, with build rate increases partially offset by the annual European summer factory shutdown. - Full-year 2026 PACCAR Parts sales growth is projected to be in the 3% to 5% range, with higher growth in the second half of the year; management expects parts growth to land toward the high end of the range. - 2026 capital expenditures are projected to be between $700 million and $750 million, and R&D expenditures are projected to be between $450 million and $480 million. - Management expects Q3 2026 gross margins to hold around 14.4% to 14.5%, with profit still increasing sequentially due to higher delivery volumes, and margins expected to strengthen through the remainder of the year. - Management projects a healthy U.S. and Canadian heavy truck market in 2027, following smoothed demand from the EPA's revised NOx regulation timeline.
Segment performance
Overall: Total Q2 2026 revenues were $7.5 billion, net income was $752 million, a 24% increase from Q1 2026. Gross margins for truck, parts and other segments increased from 13.1% to 14.4% quarter-over-quarter. Truck Segment: Q2 truck deliveries increased from 33,000 units to 38,700 units; no separate revenue or pre-tax income was reported for the truck segment in the call. PACCAR Parts: Q2 2026 achieved record revenue of $1.75 billion (23.3% of total company revenue), with pre-tax income of $417 million. Gross margins for the segment increased to 29.8%. Revenue from the PACCAR Parts Fleet Services program grew 8% quarter-over-quarter. PACCAR Financial Services: Q2 2026 pre-tax income was $124 million, which is described as a robust result driven by steady finance margins and strengthening used truck markets. The segment contributed 1.65% of total Q2 revenue and 16.5% of total pre-tax income.
Risks & headwinds
- Supplier constraints have emerged as the market ramps up, leading to minor delivery delays in the U.S. market in Q2 2026, which are expected to be resolved in Q3. - The EPA's new NOx regulation framework is still proposed, with a pending public comment period; final rules may change from current proposed terms, which could alter planned product strategy for 2027. - Long-term margin and demand projections are subject to macroeconomic conditions, changes to trade and tariff policy, and fluctuations in freight demand.
Analyst Q&A
Q: What factors drove the stronger-than-expected Q2 gross margin, and what is the current outlook for industry pricing?
A: Higher truck volumes, effective cost control, and favorable net price-cost dynamics were the main drivers. The local-for-local production strategy also delivered tariff benefits that boosted margins. Industry pricing is improving as customers face better operating conditions, with spot freight rates up 20% driving stronger overall market pricing.
Q: What factors explain the expected flat Q3 gross margin despite higher deliveries, and what is the proposed impact of the EPA's new NCP framework on customer behavior in 2027?
A: The flat margin forecast comes from two mix shifts: higher delivery volumes shift the overall revenue mix toward lower-margin trucks from higher-margin parts, and the build mix is shifting slightly from higher-margin vocational trucks to lower-margin fleet trucks. Under the current proposal, NCPs are expected to be $6,000 to $7,000 per truck, lower than the $8,000 to $10,000 cost of a fully compliant 35mg NOx engine. This framework smooths demand, avoids a large pre-buy in late 2026, and creates a stronger 2027 market.
Q: What is PACCAR's 2027 product strategy for NOx engines under the new EPA framework, and how does the current tariff environment impact results going forward?
A: PACCAR plans to sell current-generation engines at the start of 2027 per customer preference, and gradually introduce fully compliant 35mg engines through the year. A small IEPA tariff benefit was recorded in Q2 2026, and this benefit will carry forward into Q3. The Section 232 tariff regime has created a stable operating environment that favors PACCAR's local-for-local production strategy, with a lasting favorable net tariff impact.
Q: What is PACCAR's current progress and strategic approach to autonomous truck development?
A: PACCAR is continuing development of its autonomous vehicle platform with multiple partner companies including Aurora, and the program is making significant progress. The company has no current plans to launch fully driverless operations that remove the driver from the vehicle.