PACCAR(US:PCAR)2022-10-28 20:27Financial Performance - Worldwide net sales and revenues increased to $20.69 billion in 2022 from $16.84 billion in 2021, primarily due to higher truck and parts revenues [135]. - Net income for 2022 was $2.09 billion ($5.99 per diluted share), compared to $1.35 billion ($3.87 per diluted share) in 2021, marking a 55% increase [135]. - Truck segment net sales and revenues increased to $5,198.2 million in Q3 2022 from $3,452.6 million in Q3 2021, reflecting a 50.5% increase [150]. - Parts segment net sales and revenues rose to $1,471.5 million in Q3 2022 from $1,260.2 million in Q3 2021, marking a 16.8% increase [156]. - For the first nine months of 2022, Truck segment net sales reached $15,231.7 million, up from $11,837.8 million in the same period of 2021, a 28.9% increase [151]. Truck and Parts Sales - Truck revenues rose to $15.23 billion in 2022, a 29% increase from $11.84 billion in 2021, driven by higher truck deliveries and price realization [135]. - Parts sales increased to $4.30 billion in 2022, reflecting a 18% rise from $3.63 billion in 2021 due to higher demand and price realization [135]. - Average truck sales prices contributed an increase of $515.5 million to sales in Q3 2022, primarily due to higher price realization globally [150]. - Average aftermarket parts sales prices increased sales by $159.9 million in Q3 2022, driven by higher price realization in North America and Europe [158]. Market Outlook - Truck industry heavy-duty retail sales in the U.S. and Canada are projected to be between 260,000 to 300,000 units in 2023, compared to 265,000 to 285,000 units in 2022 [137]. - PACCAR Parts sales are expected to increase by 5-8% in 2023 compared to 2022 levels, following a 14-16% increase in 2022 [139]. Investments and Expenses - Capital investments are projected to be between $525 to $575 million in 2023, up from an expected $475 to $500 million in 2022 [141]. - Research and development expenses are expected to be between $350 to $400 million in 2023, compared to $330 to $340 million in 2022 [141]. - The company anticipates increasing investments in clean diesel and electric powertrain technologies, autonomous systems, and next-generation manufacturing capabilities [201]. - Over the past decade, the company has invested $7.22 billion in capital projects and R&D, enhancing operational capacity and efficiency [200]. Operational Metrics - Truck segment gross margin improved to 10.6% in Q3 2022 compared to 5.8% in Q3 2021, driven by higher sales volume and improved pricing [153]. - Parts gross margin increased to 30.4% in Q3 2022 from 28.4% in Q3 2021, attributed to higher sales volume and pricing [158]. - Truck SG&A expenses decreased to $60.7 million in Q3 2022 from $66.4 million in Q3 2021, reflecting a reduction in sales and marketing costs [152]. - Parts SG&A expenses decreased to $52.9 million in Q3 2022 from $53.4 million in Q3 2021, primarily due to lower sales and marketing costs [160]. Financial Services - New loan and lease volume increased to $1,437.1 million in Q3 2022 from $1,365.5 million in Q3 2021, reflecting a 5% increase [164]. - Average finance receivables increased by $1,204.3 million in Q3 2022, primarily due to higher average loan and dealer wholesale balances [172]. - The finance margin increased to $104.6 million in Q3 2022, up from $96.2 million in Q3 2021 [171]. - Higher portfolio yields increased interest and fees by $24.5 million, with yields at 4.9% in 2022 compared to 4.6% in 2021 [175]. Tax and Income - The effective tax rate for Q3 2022 was 21.5%, down from 21.9% in Q3 2021, reflecting a change in the mix of income generated in lower tax jurisdictions [191]. - Domestic income before taxes for Q3 2022 was $623.7 million, up from $252.7 million in Q3 2021, while total income before taxes increased to $979.7 million from $487.2 million [192]. Cash Flow and Liquidity - Total cash and marketable securities decreased by $120.0 million to $4,867.7 million as of September 30, 2022, compared to $4,987.7 million at December 31, 2021 [193]. - Net cash provided by operating activities rose by $628.0 million to $1,778.2 million in the first nine months of 2022, compared to $1,150.2 million in the same period of 2021 [194]. - Cash used in investing activities increased by $293.1 million to $1,318.5 million in the first nine months of 2022, reflecting higher net originations of loans and financing leases [195]. - Cash used in financing activities decreased by $971.0 million to $418.9 million in the first nine months of 2022, with net borrowing activities providing $437.3 million [196]. Other Notable Events - The new DAF XD truck was named International Truck of the Year 2023, showcasing advancements in vocational performance and driver comfort [134]. - The company has suspended truck and parts sales to Russia and Belarus due to international sanctions, with no significant receivables exposure [136]. - The company has $3.66 billion in line of credit arrangements, with $3.36 billion unused as of September 30, 2022 [197]. - The company has repurchased $110.0 million of its common stock under a $500.0 million repurchase plan as of September 30, 2022 [198].