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PACCAR (PCAR) to Report Q3 Earnings: Is a Beat in Store?

PACCAR Inc.PCAR is expected to report third-quarter 2017 results before the market opens on Oct 24. Last quarter, the company delivered a positive earnings surprise of 7.07%. The company beat estimates in two of the trailing four quarters, missing in the other two with an average beat of 0.08%.

The long-term EPS growth (3-5 years) for the company is currently pegged at 10%.

Let's see how things are shaping up for this announcement.

PACCAR Inc. Price and EPS Surprise

PACCAR Inc. Price and EPS Surprise | PACCAR Inc. Quote

Why a Likely Positive Surprise?

Our proven model shows that PACCAR is likely to beat estimates this quarter with the right combination of two key ingredients.

Zacks ESP: PACCAR has an Earnings ESP of +0.82% because the Most Accurate estimate of $1.09 is pegged marginally above the Zacks Consensus Estimate of $1.08. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter .

Zacks Rank: PACCAR currently sports a Zacks Rank #1 (Strong Buy). Notably, stocks with a favorable Zacks Rank #1, 2 (Buy) or 3 (Hold) have significantly higher chances of an earnings beat.

Conversely, the Sell-rated stocks (#4 or 5) should never be considered going into an earnings announcement, especially when the company is seeing negative estimate revisions.

What's Driving Better-than-Expected Results?

On the back of strategic investments, PACCAR is well-positioned in its key-markets. In the first half of fiscal 2017, the company made a total investment of $375-$425 million plus $250-$270 million for research and development of new technologies, better manufacturing facilities as well as after-market support services, which should positively impact the third-quarter results.

Along with investments, PACCAR is also expanding its global network through parts distribution centers (PDC) and is optimistic about extending footprint in South America and Russia. In North America too, it is widening its presence. For research and development, the company is opening a center in Silicon Valley, CA for developing new technologies. In addition, PACCAR is unveiling a new distribution center in Toronto, Canada.

For fiscal 2017, the company expects to achieve a total of 200,000-220,000 unit sales in Class 8 retail in the United States and Canada riding on strong economy and high levels of freight tonnage. For Europe, the company estimates about 290,000-310,000 unit sales.

Other Stocks to Consider

Here are a few other stocks worth considering from the same space as these have the right combination of elements to come up with an earnings beat this quarter:

Autoliv, Inc. ALV has an Earnings ESP of +1.99% and a Zacks Rank #2. The company's third-quarter 2017 results are expected to release on Oct 26. You can see the complete list of today's Zacks #1 Rank stocks here .

BorgWarner Inc. BWA has an Earnings ESP of +0.23% and carries a Zacks Rank of 2 as well. The company's third-quarter 2017 results are expected to release on Oct 26.

The Goodyear Rubber & Tire Company GT is also Zacks #2 Ranked with an Earnings ESP of +3.29%. The company's third-quarter 2017 results are expected to release on Oct 27.

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PACCAR Inc. (PCAR): Free Stock Analysis Report

BorgWarner Inc. (BWA): Free Stock Analysis Report

Autoliv, Inc. (ALV): Free Stock Analysis Report

The Goodyear Tire & Rubber Company (GT): Free Stock Analysis Report

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


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

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