PACCAR (NASDAQ:PCAR) reported third-quarter 2026 revenue of $7.94 billion and net income of $847.5 million, representing year-over-year increases of 19% and 44%, respectively, as the truck maker cited strong customer demand, improved pricing and record parts revenue.
Chief Executive Officer Preston Feight said the company delivered 40,100 trucks in the quarter, though supply constraints modestly affected production. PACCAR expects suppliers to improve their ability to support higher industry build rates in the fourth quarter and projected deliveries of 41,000 to 43,000 trucks.
“All you have to do is miss a single part on a truck and it becomes impactful,” Feight said, adding that the company is working closely with suppliers and has made progress toward supporting higher fourth-quarter output.
Margins Remain High Despite Production Costs
PACCAR’s third-quarter trucks, parts and other gross margin was 14.5%. The company expects fourth-quarter gross margins to remain in a range of 14% to 15%.
Feight said fourth-quarter margins will reflect higher production costs and inefficiencies associated with supply availability, even as truck pricing remains strong. He said price-cost remained favorable during the quarter, primarily because of favorable truck price realization.
The company said tariffs were not material to its quarterly financial performance. Feight said PACCAR continued to incur certain tariff costs on imports while also receiving some benefits, but characterized the overall impact as part of the normal business mix rather than a one-time gain.
Truck Market Outlook Points to 2027 Growth
PACCAR estimates the U.S. and Canadian Class 8 market will total 240,000 to 260,000 trucks in 2026 and expand to a range of 240,000 to 280,000 trucks in 2027. The company cited economic growth, infrastructure investment and an improving freight market as drivers of demand.
For Europe, PACCAR forecasts the above-16-ton market at 300,000 to 320,000 units in both 2026 and 2027. The South American above-16-ton market is expected to reach 100,000 to 105,000 vehicles this year and increase to 105,000 to 115,000 next year.
Feight said customer discussions indicate fleets prefer proven 200-milligram engine technology as they assess the cost of future lower-NOx platforms. Customers are beginning to place orders for 2027, though order activity could increase once nonconformance penalty, or NCP, levels associated with emissions regulations are finalized.
“Every customer we meet with is much more interested in proven, stable technology that they’ve had time to vet in their operations,” Feight said.
The company expects uncertainty surrounding NCP levels to be most relevant early in 2027, with greater clarity potentially supporting demand later in the year. Feight said PACCAR expects a decision within four to eight weeks, though the timing remains uncertain.
Parts Business Posts Record Revenue
PACCAR Parts generated record quarterly revenue of $1.78 billion. President Kevin Baney attributed the result to investments in parts distribution, growth in the TRP all-makes brand, transportation solutions and additional dealer retail locations.
The company expects continued parts growth in the fourth quarter and said it remains on track for its previously forecast 3% to 5% full-year growth range. Baney said the parts business has increased market share and grown its share of wallet with customers despite a constrained parts market.
Management said customers have faced elevated operating costs, including higher diesel prices, while some trucks have been sidelined by CDL enforcement activity. Those dynamics have deferred certain maintenance purchases and affected the product mix, rather than reflecting heightened pricing competition, according to Baney.
- PACCAR Financial Services reported pretax income of $138 million, up 9.4% from a year earlier, supported by stable finance margins and higher used-truck pricing.
- The company generated $2.5 billion in cash from operations through the first nine months of 2026, Chief Financial Officer Brice Poplawski said.
- Capital expenditures are projected at $650 million to $700 million in both 2026 and 2027.
- Research and development expense is expected to be $440 million to $460 million in 2026 and $460 million to $500 million in 2027.
Connected Vehicle and Autonomous Initiatives
PACCAR recently introduced PACCAR Connect, a transportation technology platform designed to integrate fleet telematics, truck data, customer productivity applications, Apple CarPlay and electronic driver logs into a single vehicle display system.
Feight said the platform could reduce the need for customers to install third-party telematics hardware, while creating opportunities for PACCAR to offer applications, predictive maintenance capabilities and dealership-connected service solutions. Baney said the system can help PACCAR remain connected with customers throughout the operating cycle of their vehicles.
On autonomous trucking, Feight said PACCAR is developing a proprietary autonomous vehicle platform intended to facilitate factory integration of autonomous systems. He said the company’s approach prioritizes safety, validation and gradual deployment in specific lanes and operating conditions, working with partners including Stack AV and Aurora.
“It’s got to be a win for our customers, it’s got to be a win for the developers, and it’s got to be a win for PACCAR,” Feight said.
About PACCAR (NASDAQ:PCAR)
PACCAR Inc (NASDAQ: PCAR) is a global manufacturer of heavy- and medium-duty trucks. Through its Kenworth, Peterbilt and DAF brands, the company produces vehicles used for long-haul transportation, construction, distribution and other commercial applications. PACCAR also manufactures PACCAR-branded engines and provides related parts and aftermarket support.
The company’s operations extend across North America, Europe, South America, Australia and other international markets. In addition to truck manufacturing, PACCAR operates a worldwide parts distribution network and offers financial services, including retail financing and leasing for trucks and related equipment.
