Markets

PACCAR (PCAR) to Report Q2 Earnings: What's in the Offing?

PACCAR Inc. PCAR is slated to release second-quarter 2020 results on Jul 21, before the opening bell. The Zacks Consensus Estimate for the quarter’s earnings is pegged at 31 cents per share on revenues of $2.93 billion.

The trucking giant delivered disappointing results in the last reported quarter on lower-than-expected revenues from the Truck and Parts segments. Over the trailing four quarters, PACCAR beat estimates on two occasions for as many misses, the average negative surprise being 1.63%. This is depicted in the graph below:

PACCAR Inc. Price and EPS Surprise

PACCAR Inc. Price and EPS Surprise

PACCAR Inc. price-eps-surprise | PACCAR Inc. Quote

Trend in Estimate Revision

The Zacks Consensus Estimate for second-quarter 2020 earnings per share has moved 3 cents north over the past seven days, calling for an 82.58% slump year on year. The Zacks Consensus Estimate for revenues also suggests a decline from the prior-year reported figure of $6.27 billion.

Factors to Note

With the COVID-19 pandemic rattling the auto industry, PACCAR is expected to have been affected by the decline in customer demand and the bleak world economy outlook. Lower orders for Class 8 trucks might have dented revenues during the second quarter. The Zacks Consensus Estimate for revenues from the Trucks and Parts units are pegged at $1,860 million and $872 million, respectively, indicating a decline from the $5,212 million and $1,025 million witnessed in the year-ago quarter. The Zacks Consensus Estimate for revenues from the Financial Services segment is pegged at $348 million, suggesting a decline from the year-ago quarter’s $361 million.

Nonetheless, amid the pandemic, PACCAR is focusing on cost-cutting efforts, including reduced capex and lower R&D spending. While dismal revenues due to lower Class 8 truck orders might have hurt the company’s quarterly performance, solid cost-containment efforts are anticipated to have offered some respite.

Earnings Whispers

The proven Zacks model does not conclusively predict an earnings beat for PACCAR this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. However, that is not the case here as elaborated below. You can see the complete list of today’s Zacks #1 Rank stocks here.

Earnings ESP: PACCAR has an Earnings ESP of -6.46%. This is because the Most Accurate Estimate of 29 cents per share comes in two cents lower than the Zacks Consensus Estimate. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: PACCAR currently carries a Zacks Rank #3 (Hold).

Stocks to Consider

Here are some companies, which according to our model have the right combination of elements to post an earnings beat in the to-be-reported quarter.

OReilly Automotive, Inc. ORLY has an Earnings ESP of +50% and carries a Zacks Rank #2 at present. The company is slated to release second-quarter 2020 earnings on Jul 29.

General Motors GM has an Earnings ESP of +13.07% and currently carries a Zacks Rank #3. The company is slated to release second-quarter 2020 earnings on Jul 29.

LKQ Corp. LKQ has an Earnings ESP of +41.49% and carries a Zacks Rank #3 currently. The company is slated to release second-quarter 2020 earnings on Jul 30.

Biggest Tech Breakthrough in a Generation

Be among the early investors in the new type of device that experts say could impact society as much as the discovery of electricity. Current technology will soon be outdated and replaced by these new devices. In the process, it’s expected to create 22 million jobs and generate $12.3 trillion in activity.

A select few stocks could skyrocket the most as rollout accelerates for this new tech. Early investors could see gains similar to buying Microsoft in the 1990s. Zacks’ just-released special report reveals 8 stocks to watch. The report is only available for a limited time.

See 8 breakthrough stocks now>>


Click to get this free report

PACCAR Inc. (PCAR): Free Stock Analysis Report

OReilly Automotive, Inc. (ORLY): Free Stock Analysis Report

General Motors Company (GM): Free Stock Analysis Report

LKQ Corporation (LKQ): 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

Stocks

Latest Markets 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