Paccar Inc.

Strong Q2 financial performance; margins beat expectations (good/surprising): - Revenues: $7.5B; Net income: $752M, +24% vs Q1. - Key driver: “Strong truck division performance,” with truck deliveries up to 38,700 (from 33,000). - Parts: Record $1.75B revenues and $417M quarterly pre-tax income; gross margin improved to 29.8% (and consolidated/parts-other margin cited improved 13.1% → 14.4%). - Gross margin drivers cited: higher volume, local-for-local production tariff benefit, and cost control (price vs. cost better than expected); also operating effectiveness + warranty performance; no sign the beat was from a major “EPA refund” (company said profits were mainly net price-cost and operational factors).

Forward guidance: truck market and deliveries ramp in 2H; margins steady-to-up (good): - U.S./Canada heavy retail market: ~105k first-half, ~145k expected second-half → ~250k full-year. - Europe (16+ ton): ~310k for 2026 (healthy; modest economy growth). - South America (16+ ton): ~100k–110k range expected. - Company deliveries: Q3 estimated ~42,000 (increase vs Q2 but partly offset by the normal European summer shutdown). - Truck parts margins: Q3 forecast ~14.5%, then further improve in Q4.

2026 full-year capital/R&D investment and parts/financial services outlook (opportunity/neutral): - Capex: $700M–$750M. - R&D: $450M–$480M. - Parts sales growth outlook: 3%–5% for the full year; management expects faster growth in 2H as utilization increases and customers buy more parts (notably via PACCAR Parts fleet services, +8% QoQ in Q2). - PACCAR Financial: Q2 pre-tax income $124M; expects strength supported by improving used truck markets.