The 5 Most Interesting Analyst Questions From PACCAR's Q1 Earnings Call
PACCAR's first quarter results were met with a negative market reaction, reflecting challenges in navigating tariff-driven input cost increases and softer market conditions. Management cited that higher costs, largely tied to recently imposed tariffs, could not be fully offset by pricing during the quarter. CEO Preston Feight noted, 'Our teams in Denton and Chillicothe have done a great job building trucks for us for the U.S. markets, but there are components that come into those factories from our suppliers, from other countries. And so we don't know how they would be affected.' The company pointed to continued strength in its parts and financial services businesses but acknowledged that truck divisions faced margin pressure.
Is now the time to buy PCAR? Find out in our full research report (it's free).
Revenue: $6.91 billion vs analyst estimates of $6.97 billion (16% year-on-year decline, 0.8% miss)
Adjusted EPS: $1.46 vs analyst expectations of $1.58 (7.5% miss)
Adjusted EBITDA: $863.7 million vs analyst estimates of $946.5 million (12.5% margin, 8.7% miss)
Operating Margin: 11.1%, down from 15.9% in the same quarter last year
Organic Revenue fell 14.6% year on year (1.5% in the same quarter last year)
Market Capitalization: $48.17 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Charles Dillard (Bernstein): Asked for detail on how much tariff costs can be passed through to customers and the timing of margin recovery; CEO Preston Feight said the ability to offset tariffs depends on pricing actions and backlog timing, with full recovery taking time as policies evolve.
Jamie Cook (Truist): Questioned the root causes of margin disappointment and comfort with inventory levels; Feight clarified that margin pressure mainly stemmed from tariff-related cost increases not fully priced in, while inventories were described as manageable given product mix.
Michael Feniger (Bank of America): Inquired about the impact of upcoming EPA emissions changes on cost structure and R&D spend; Feight explained that depending on regulatory outcomes, cost impacts could vary, but PACCAR is prepared with multiple compliant engine options.
Tami Zakaria (JPMorgan): Sought clarification on how tariffs affect parts margins and pass-through ability; CFO Harrie Schippers explained that parts pricing can be adjusted more quickly than trucks, so margin impact in this segment is limited.
Scott Group (Wolfe Research): Asked whether margin compression in Q2 is a timing issue or reflects limited pricing power; Feight described the main issue as timing between cost increases from tariffs and the later realization of price increases.
In the coming quarters, the StockStory team will be monitoring (1) the outcome of ongoing tariff policy investigations and potential changes in U.S. trade restrictions, (2) PACCAR's ability to implement and sustain price increases across its truck and parts businesses, and (3) signs of stabilization or improvement in truck demand—particularly in the North American and European markets. Progress on connected vehicle initiatives and capacity expansions will also be important factors shaping the company's longer-term outlook.
PACCAR currently trades at $93.51, up from $92.06 just before the earnings. In the wake of this quarter, is it a buy or sell? Find out in our full research report (it's free).
Market indices reached historic highs following Donald Trump's presidential victory in November 2024, but the outlook for 2025 is clouded by new trade policies that could impact business confidence and growth.
While this has caused many investors to adopt a "fearful" wait-and-see approach, we're leaning into our best ideas that can grow regardless of the political or macroeconomic climate. Take advantage of Mr. Market by checking out our Top 9 Market-Beating Stocks. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025).
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-small-cap company Exlservice (+354% five-year return). Find your next big winner with StockStory today.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Yahoo
14 minutes ago
- Yahoo
Jeff Bezos and Lauren Sánchez are one of the richest married couples. Here's how the ultrawealthy do prenups.
With Jeff Bezos and Lauren Sánchez now married, they're likely to have a complex prenup. Lawyers and wealth management experts outlined the prenup process for the superrich. Business control, property ownership, and trusts are just some of the questions prenups tackle. Hindsight is 20/20 — especially when hindsight is worth $38 billion. Amazon founder Jeff Bezos and MacKenzie Scott, his first wife, got married without a prenup (in 1993, before Bezos started Amazon). Scott received roughly $38 billion in Amazon shares in the settlement, making her one of the world's richest women. On Friday, Bezos got married again, this time to helicopter pilot and former journalist Lauren Sánchez. Experts in family law and wealth management told Business Insider that the couple is almost certain to have a complex prenup. Bezos is, after all, worth more than $200 billion today. A representative for Bezos didn't respond to a request for comment from BI about whether the couple has a prenup. Anne Paape, the managing director and head of wealth strategy at Cresset Capital, a multi-family office for entrepreneurs and multi-generational families of wealth, said prenups are generally becoming more common and are sometimes even mandated in family trusts for the ultrawealthy. Prenups begin with both people fully disclosing their financial assets and debts, she said. Besides family, they can also involve everyone from business partners and tax attorneys to luxury realtors and aviation experts who help appraise homes and private jets, said Brooke Summerhill, a divorce financial consultant who primarily works with ultra-high net worth clients. "It's not the clients making a lot of these decisions, it's their team helping them understand what those decisions are and making those decisions with them," she told BI. Paape doesn't know the details of Bezos' potential prenup but said his situation isn't entirely unique: Many superrich weddings mark second or third marriages for at least one spouse, often one whose assets have changed considerably since their first time tying the knot. "He will absolutely have protection against anything that he could," Summerhill said, adding that he likely won't let his pre-marriage assets co-mingle with Sánchez's assets. The more money you have, the more potential prenup headaches you'll have, especially when it comes to business interests and properties. Wealthy clients tend to have properties and business interests around the globe, making it harder to ensure compliance with divorce and death laws in various jurisdictions. Many entrepreneurs like Bezos are focused on insulating their businesses in the event of a divorce or death. Most don't want to risk giving an ex-partner enough stock to have a say in how the company runs, Paape told BI. "You could try to compensate for keeping that off the table," Paape said. "What else if you were to get divorced? What other resources could you provide to that person?" Clauses safeguarding the appreciation of assets during a marriage are also key for wealthy clients, Summerhill said. If the couple ever divorces, it's not unlikely that Sánchez would get a lump sum, Amazon shares, and some real estate, according to Summerhill and Raymond Hekmat, a family law attorney in Beverly Hills who primarily writes prenups. But a marriage can also end in death, and that's where a death clause can come in. As Summerhill put it, this "prevents the surviving spouse from claiming a bigger portion of that deceased person's separate property." A surviving spouse commonly receives a lump sum or life insurance payout upon their spouse's death, she said, but a last will and testament may take precedent over the prenup. Prenups for the ultrawealthy have repercussions beyond the couple, whether it's about who takes over the family empire or gets the keys to the Hamptons home. "There's more people that care about the resolution of that breakup, whether it's divorce or death," Paape said. "It's business partners, it's employees, it's charities you support, it's children and grandchildren." She said trusts "are a no-brainer " for children of the ultrarich and that many provisions deal with inherited property or business ownership. Bezos shares four children with Scott, and Sánchez has three kids. Hekmat said all the prenups he draws up have a confidentiality provision, and some can include social media restrictions. "In the event of a breakup, you can't disparage the other party or discuss the prenup in any way with the public, and there could be penalties involved," he said. Prenups can also include sunset clauses, which say that some provisions or even the full agreement expires after a certain period of time. Some people may choose to change certain provisions and become more generous after they've been with their spouse for a while, Paape said. Hekmat said that even with prenups, couples risk messy legal and financial fights down the line. Proclaimed love and devotion aside, he kept his advice for the Bezoses of the world simple. "My bottom line for billionaires is don't get married." Have a tip or a story to share about your own experiences with a prenup? Contact these reporters via email at atecotzky@ or sjackson@ or on Signal at alicetecotzky.05. Use a personal email address and a nonwork device; here's our guide to sharing information securely. Read the original article on Business Insider
Yahoo
14 minutes ago
- Yahoo
Meta hires four more OpenAI researchers, The Information reports
(Reuters) -Meta Platforms is hiring four more OpenAI artificial intelligence researchers, The Information reported on Saturday. The researchers, Shengjia Zhao, Jiahui Yu, Shuchao Bi and Hongyu Ren have each agreed to join, the report said, citing a person familiar with their hiring. Earlier this week, the Instagram parent hired Lucas Beyer, Alexander Kolesnikov and Xiaohua Zhai, who were all working in OpenAI's Zurich office, the Wall Street Journal reported. Meta and ChatGPT maker OpenAI did not immediately respond to a Reuters request for comment. The company has recently been pushing to hire more researchers from OpenAI to join chief executive Mark Zuckerberg's superintelligence efforts. Reuters could not immediately verify the report.
Yahoo
14 minutes ago
- Yahoo
‘More empty homes in America than there are homeless people': Affordability agenda drives NY primary
Critics debate whether the primary win of Zohran Mamdani is a referendum on the future of the Democratic party. One thing is certain – he clearly struck a nerve with voters, and it's that Americans can barely afford to live in this country. Author and economics professor Andre Perry argues that nothing will be affordable if wages can't keep pace with rising costs. He notes that New York City has 'lost 75,000 middle income jobs' just in the last year. According to radio show host and NY
