PACCAR Inc

PACCAR reported 2Q 2026 revenue of $7.5 billion and net income of $752 million, up 24% from the first quarter. PACCAR Parts delivered record quarterly revenue of $1.75 billion, pre-tax income of $417 million, and gross margin of 29.8%, while PACCAR Financial Services posted pre-tax income of $124 million. Truck deliveries increased to 38,700 from 33,000. For Q3, management estimates truck deliveries of around 42,000, Parts gross margin of about 14.5%, and expects Parts margins to increase further in Q4. Full-year Parts sales growth is estimated at 3% to 5%, U.S./Canada heavy truck retail sales at around 250,000 units, Europe above-16-ton market at around 310,000 trucks, and South America above-16-ton market at 100,000 to 110,000 vehicles. 2026 capital investments are planned at $700 million to $750 million and R&D at $450 million to $480 million.

Preston Feight emphasized that PACCAR’s employees drove the quarter by raising production and build rates around the world while maintaining high quality. He said the company is benefiting from local-for-local manufacturing, favorable price-cost dynamics, and stronger operating conditions for customers. On the market outlook, he described U.S./Canada demand as strengthening, Europe as healthy, and South America as stable, while calling the EPA clarification supportive of a smoother transition into 2027.

Brice Poplawski said the strong quarter was mainly a net price-cost benefit, driven by operating effectiveness, good warranty performance, and local-for-local efficiencies. He also noted a net tariff benefit in the quarter and said the tariff position should remain similar in Q3. He reiterated planned 2026 capital spending of $700 million to $750 million and R&D of $450 million to $480 million, framing those investments around manufacturing, clean diesel engines, hybrid and electric powertrains, and connected vehicle services.

Analysts focused on why gross margin and profit per truck were so strong, and management said the main drivers were higher truck volume, local production benefits, cost controls, warranty performance, and a net tariff benefit rather than any EPA refund. Several questions centered on the new EPA NOx framework; management said current guidance suggests nonconformance penalties of about $6,000 to $7,000 per truck, which is likely below the cost of a fully compliant engine, and that PACCAR plans to sell current engines initially and ease customers into the 35-milligram engines. Analysts also pressed on 2027 pricing and market share, and management argued the framework levels the playing field and should support a healthier market rather than a sharp prebuy.