Paccar's third-quarter financial highlights
- Consolidated net sales and revenues of $6.67 billion.
- Consolidated net income of $590 million.
- Global truck deliveries of 31,900 units.
- Paccar Parts revenues of $1.72 billion.
- Paccar Parts pretax income of $410 million.
- Paccar Financial Services pretax income of $126.2 million.
- Capital investments of $156 million and research and development expenses of $111 million.
- Cash generated from operations of $1.53 billion.
Paccar reported third quarter earnings on Tuesday and even though income was off 39%, the company says Q3 was a good one.
"Peterbilt, Kenworth and DAF's excellent trucks contributed to the good results," says Preston Feight, CEO. "Paccar Parts and Paccar Financial Services continued to deliver excellent performance and strong profits. I am very proud of our employees and dealers who delivered outstanding trucks and transportation solutions to our customers."
The company's net income for the third quarter was $590 million, compared to $972.1 million in the same period last year, a drop of 39%. Revenues were $6.67 billion, drop of 19% year over year. A freight recession and uncertainty in the broader economy has plagued truck orders this year.
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"The new Section 232 truck tariffs that are scheduled to begin in November should bring clarity to the market in the coming months," Feight says. "Paccar is proud to produce over 90% of its U.S. sold trucks in Texas, Ohio and Washington."
Kenworth launched the T880S for high horsepower applications.
What do truck markets look like?
Paccar says Class 8 retail sales in 2025 for the U.S. and Canada are expected to be in the range of 230,000-245,000 vehicles. For 2026, the company expects this to rise to 230,000-270,000 trucks.
"Kenworth and Peterbilt's 30.3% market share this year reflects the superior quality and operating performance of our trucks," says Kevin Baney, Paccar's executive vice president.
A new addition to the marketplace is Kenworth's T880S vocational truck. Designed for heavy haul, logging and high horsepower applications, the T880S has a set-forward front axle configuration with a longer cab length to optimize weight distribution and bridge law compliance. The powertrain offers 605 horsepower and 2,050 lb.-ft. of torque.
How did Paccar Parts do in Q3?
Paccar Parts had a pretax profit of $410 million in the third quarter, about a 1% increase over Q3 2024. Revenues were $1.72 billion, slightly better than a 3% increase year over year.
"Paccar Parts provides excellent aftermarket parts and transportation solutions," says Bryan Sitko, Paccar vice president and Paccar Parts general manager. "Technology solutions such as Managed Dealer Inventory, connected trucks and innovative programs such as Fleet Services provide a comprehensive framework that delivers a myriad of benefits to our customers."
Paccar Parts has 20 distribution centers with more than 3.9 million square feet. It will open a new, 180,000-square-foot distribution center in Calgary, Canada, in 2026.
Paccar Financial Services has 'very good' Q3
Paccar Financial Services (PFS) earned pretax income of $126.6 million and revenues of $565.3 million in the third quarter. Both figures are up year-over-year.
"PFS achieved very good third quarter results due to its high-quality portfolio and an improving used truck market," says Craig Gryniewicz, Paccar vice president. "PFS is a leader in the market with its superior Kenworth, Peterbilt and DAF products, innovative technologies that provide seamless credit application and loan servicing processes, and its support of customers in all phases of the business cycle."
With a portfolio of 229,000 trucks and trailers, PFS has total assets of more than $23.02 billion, including PacLease.
"Paccar's strong balance sheet, complemented by its A+/A1 credit ratings, enables PFS to have excellent access to the commercial paper and medium-term note markets," says Terren Drake, Paccar Financial Corp. president. "PFS issued $2.37 billion of medium-term notes during the first nine months of the year in support of growing market share."
Paccar is part of the battery joint venture Amplify Cell Technologies, which plans to open a plant in Mississippi in 2028.
Capital investments and R&D
Paccar has invested $9.1 billion in facilities, products and technologies in the last 10 years, including $156 million in capital projects and $111 in research and development this year.
"Capital expenditures are projected to be in the range of $750-$775 million and research and development expenses are estimated to be in the rage of $450-$465 million in 2025," says Brice Poplawski, senior vice president and CFO. "Paccar is investing in exciting next generation clean diesel and alternative powertrains, integrated connected vehicle services, expanded manufacturing capabilities and advanced driver assistance systems that create value for customers."
In 2026, Paccar estimates it will spend $725-$775 million in capital projects and $450-$500 million in research and development. It will also open a $35 million engine remanufacturing facility in Mississippi next year.
The company is also making progress in emerging technologies such as electric battery cells and AI. Amplify Cell Technologies, a joint venture supported by Paccar, is building a battery factory in Mississippi with production expected to start in 2028. It will provide lithium-iron-phosphate batteries for Kenworth and Peterbilt battery electric trucks.
AI, Paccar says, is helping it reduce operational costs and enhance performance.
"By leveraging AI, Paccar has reduced the time and cost of upgrading its AI infrastructure," says John Rich, senior vice president and CTO. "Our predictive analytics technology utiliizes AI to forecast and implement vehicle service parameters, thereby enhancing vehicle uptime for our customers."
