Stocks

Paccar (PCAR) Q3 Earnings Miss Estimates

Paccar (PCAR) came out with quarterly earnings of $1.08 per share, missing the Zacks Consensus Estimate of $1.21 per share. This compares to earnings of $1.11 per share a year ago. These figures are adjusted for non-recurring items.

This quarterly report represents an earnings surprise of -10.74%. A quarter ago, it was expected that this truck maker would post earnings of $1.38 per share when it actually produced earnings of $1.41, delivering a surprise of 2.17%.

Over the last four quarters, the company has surpassed consensus EPS estimates two times.

Paccar, which belongs to the Zacks Automotive - Domestic industry, posted revenues of $4.74 billion for the quarter ended September 2021, surpassing the Zacks Consensus Estimate by 5.58%. This compares to year-ago revenues of $4.54 billion. The company has topped consensus revenue estimates three times over the last four quarters.

The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call.

Paccar shares have added about 1.1% since the beginning of the year versus the S&P 500's gain of 21.6%.

What's Next for Paccar?

While Paccar has underperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock?

There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately.

Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions.

Ahead of this earnings release, the estimate revisions trend for Paccar was unfavorable. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #4 (Sell) for the stock. So, the shares are expected to underperform the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.

It will be interesting to see how estimates for the coming quarters and current fiscal year change in the days ahead. The current consensus EPS estimate is $1.29 on $5.05 billion in revenues for the coming quarter and $5.33 on $20.34 billion in revenues for the current fiscal year.

Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Automotive - Domestic is currently in the bottom 23% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1.


More Stock News: This Is Bigger than the iPhone!

It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 77 billion devices by 2025, creating a $1.3 trillion market.

Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 4 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2022.

Click here for the 4 trades >>

Click to get this free report

PACCAR Inc. (PCAR): Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Other Topics

Investing

Latest Stocks Videos

Zacks

Zacks is the leading investment research firm focusing on stock research, analysis and recommendations. In 1978, our founder discovered the power of earnings estimate revisions to enable profitable investment decisions. Today, that discovery is still the heart of the Zacks Rank. A wealth of resources for individual investors is available at www.zacks.com.

Learn More