Forbes Earnings Preview: PACCAR

In the month leading up to the Paccar‘s (PCAR) first quarter earnings announcement slated for Tuesday, April 24, 2012, expectations have risen for the upcoming results. The consensus analyst estimate has gone from 76 cents per share to the current projection of earnings of 78 cents per share.

What to Expect:

Analysts’ estimates are up 47.2% from the year-ago quarter, when PACCAR reported earnings of 53 cents per share. Over the past three months, the consensus estimate has risen from 77 cents. Analysts are expecting earnings of $3.36 per share for the fiscal year. Revenue is expected to be $4.08 billion for the quarter, 24.3% higher than the year-earlier total of $3.28 billion. For the year, revenue is projected to roll in at $17.2 billion.

Trends to Watch For:

In each of the last four quarters, the company has seen double-digit year-over-year revenue growth. Over that span, the company has averaged growth of 58.6%, with the biggest boost coming in the third quarter of the last fiscal year when revenue rose 67.4% from the year earlier quarter.

The company has reported increasing profit for three straight quarters. The 93% year-over-year growth in net income in the most recent quarter came after the more than twofold profit growth in the third quarter of the last fiscal year and the more than twofold rise in the second quarter of the last fiscal year.

Analyst Ratings:

The majority of analysts (53.3%) rate PACCAR as a buy. That percentage is still below the mean analyst rating of its nearest eight competitors, which average 66.7% buys. Analyst sentiment has improved recently, as the number of buy ratings has risen slightly over the past three months.

Competitors:

PACCAR designs, manufactures, and distributes commercial trucks and related aftermarket parts, and is involved with financing and leasing products and services provided to customers and dealers. One of PACCAR’s main competitors in the machinery industry, Cummins (CMI), will report earnings on May 1, 2012. Other competitors in the industrials sector include: Navistar International (NAV), Wabash National (WNC), and Tata Motors (TTM).

Recent Price Movement:

Since January 20, 2012, the stock price has fallen 2.4% to $42.69 from $43.72.

Source: http://www.forbes.com/sites/narrativescience/2012/04/19/forbes-earnings-preview-paccar-3/

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