Paccar Q3 Profit Tumbles on Truck Sales Slump
Parts and Financial Divisions Cushion Decline
Key Takeaways:
- Paccar reported third-quarter 2025 net income of $590 million, down 39% from a year earlier, as global truck sales fell 29% to 31,900 units.
- The company’s $6.67 billion in revenue beat analyst expectations due to record results in its parts division and higher profits in financial services.
- Executives expect deliveries and U.S.-Canada Class 8 truck sales to rise in 2026, citing tariff clarity, emissions rules and an improving freight market.
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Profit at truck maker Paccar slumped in the third quarter of 2025 as vehicle sales fell, , but executives are optimistic about the prospects for the coming quarters.
The company’s Q3 profit would have been even worse if not for improved revenue at the parts and financial services divisions, with the former posting record sales and the latter benefiting from an improved used truck market.
“Paccar delivered good revenues and net income in the third quarter of 2025. Peterbilt, Kenworth and DAF’s excellent trucks contributed to the good results,” said CEO Preston Feight in comments accompanying the results. “Paccar Parts and Paccar Financial Services continued to deliver excellent performance and strong profits.”
Paccar posted net income of $590 million ($1.12 per diluted share) in the most recent quarter, down 39.3% compared with $972.1 million ($1.85) in the same period a year earlier.
The company’s revenue in the most recent three-month period totaled $6.67 billion, a decrease of 19% compared with $8.24 billion in Q3 2024.
That said, Paccar met or outperformed analyst expectations. Paccar’s EPS was in line with the Zacks Consensus Estimate. The revenue total topped analyst estimates of $6.18 billion, according to Investing.com. Paccar’s share price initially dipped after the release of the earnings report Oct. 21 but climbed to one-month highs thereafter.
Bellevue, Wash.-based Paccar sold 31,900 trucks globally in Q3, a decrease of 29% from 44,900 trucks in the year-ago period. Paccar revenue from truck sales totaled $4.38 billion in the most recent quarter, down 27.4% compared with $6.03 billion in the year-ago period.
Paccar’s sales in the U.S. and Canada totaled 17,100 trucks, down 34% from 25,900 trucks in the same period 12 months earlier, although the decline was not unexpected.
The company estimates industrywide U.S. and Canada Class 8 retail truck sales in 2025 will be in a range of 230,000 to 245,000 vehicles.
A Peterbilt Model 537 vocational truck. (Peterbilt)
Volumes in the less-than-truckload and vocational segments of the market are positive while the truckload sector continues to see a great deal of uncertainty, Feight told analysts during Paccar’s quarterly earnings call.
At the start of 2025, Paccar estimated sales would be in a 250,000 to 280,000 trucks range.
The truck maker expects fourth-quarter 2025 deliveries to total 32,000 trucks globally, its top executives said during the call.
Sales to Climb in 2026
Paccar expects industrywide U.S. and Canadian Class 8 retail sales for 2026 to increase to a range of 230,000 to 270,000 vehicles.
There will be less tariff uncertainty and greater clarity on emissions regulation plus an improved freight market, Feight said.
The Trump administration provided the first in-depth details on Section 232 medium- and heavy-duty truck import tariffs on Oct. 17. The delayed tariffs will now come into effect Nov. 1.
Paccar said it expects to benefit from the tariffs, with analysts quizzing Feight and fellow executives on how much.
“It will take a little bit of time to implement” the revised tariff regime, Feight said, adding later: “We’re still understanding how the tariffs feather off.”
Still, no matter the case, Feight said: “It gives us a bit of a competitive leg up.”
“We feel we can gain market share and have the capacity to handle [an increase in production levels],” he said.
A decrease in uncertainty over tariffs will encourage fleet managers to restart their replacement cycles, Feight said, particularly in the truckload segment of the market.
“It’s been a long, hard period for the truckload segment and at some point they’ve got to replace their trucks,” he said.
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“It is a good time to buy trucks. It is a good time for fleets to restock,” Paccar’s top executive said.
An upturn in the truckload segment would also allow Paccar to consider increasing its prices, Feight added.
However, whether 2026 sales come in at the bottom or top ends of the range forecast by Paccar will depend mostly on nitrogen oxides emissions limits for heavy-duty trucks, executives said.
A relaxing of the Biden-era 0.035 grams per horsepower-hour Heavy-Duty Nitrogen Oxide rule currently due to enter effect Jan. 1, 2027, would eat away at any pre-buy by fleets in 2026, Feight said.
However, Feight said: “The law’s the law until it changes,” noting Paccar was ready for whatever path the Environmental Protection Agency chose.
Parts, Financial Services Shine
Outside of the truck-making division, Paccar units are already finding greener pastures.
Paccar Parts posted a pretax profit of $410 million in the most recent quarter, up 0.8% compared with $406.7 million in Q3 2024.
Q3 revenue at the parts unit was a record $1.72 billion, compared with $1.66 billion a year earlier.
Paccar said it plans to open a 180,000 square-foot parts distribution center in Calgary, Canada, in 2026 to expedite parts delivery to dealers and customers in the region.
Paccar Parts operates 20 parts distribution centers globally.
A Paccar Parts distribution center. (Paccar)
The company also expects to open a remanufacturing plant in Columbus, Miss., in 2026.
Paccar Financial Services earned pretax income of $126.2 million in Q3, up 18.5% compared with $106.5 million in the year-ago quarter.
PFS posted revenue of $565.3 million in the most recent quarter, up 5.5% compared with $536.1 million in the same period last year.
“PFS achieved very good third-quarter results due to its high-quality portfolio and an improving used truck market,” Paccar Vice President Craig Gryniewicz said in comments accompanying the results.
PFS currently has a portfolio of 229,000 trucks and trailers. PacLease, the company’s truck leasing company, currently has a fleet of 39,000 vehicles.
