Can PACCAR (PCAR) Spring A Surprise This Earnings Season?
Zacks Investment Research | Apr 20, 2017 10:05PM ET
PACCAR Inc. (NASDAQ:PCAR) is set to report first-quarter 2016 results before the market opens on Apr 25. In the last quarter, the company posted a negative earnings surprise of 5.75%. Let’s see how things are shaping up for this announcement.
Factors Influencing this Quarter
PACCAR benefits from a sizeable market share in the U.S. and Canada. Moreover, the company undertakes active capital deployment.
PACCAR is well positioned in the key markets due to its strategic investments. The company has invested $6 billion in capital projects for launching innovative products and new technologies in the past decade. For 2017, the company targets capital investments in the range of $375–$425 million and research and development expenses of $250–$280 million.
The company continues to expand its global network of strategically located parts distribution centers (PDC). PACCAR is optimistic about its expansion plans in South America and Russia. The DAF factory in Ponta Grossa and the establishment of a subsidiary named DAF Trucks in Russia are expected to boost earnings. Further, it is expanding the 35-year old truck factory in Denton, TX, and adding a new automated storage system for painted components. This will increase both productivity and capacity at the plant.
However, PACCAR may be affected by the expected decline in Class 8 industry retail sales in the U.S. and Canada, as well as in above 16-ton truck sales in Europe. Moreover, it faces stiff competition in the commercial trucks market.
Earnings Whispers
Our proven model does not conclusively show that PACCAR is likely to beat earnings this quarter. This is because a stock needs to have both a positive Zacks Investment Research
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