PACCAR Q2 2026: net income rose 3.9% to $752.0M ($1.43/share) on flat $7.55B revenue, as higher truck prices and lower tariff costs lifted Truck pre-tax profit 17% despite 2% fewer deliveries.
Revenue
$7.5B
+0.5% YoY
Net income
$752M
+3.9% YoY
Diluted EPS
$1.43
+4.4% YoY
Operating margin
11.9%
Overview
PACCAR, the maker of Kenworth, Peterbilt and DAF trucks, earned $752.0 million ($1.43 per diluted share) in the second quarter of 2026 (April–June), up 3.9% from $723.8 million ($1.37) a year earlier, on revenue that was essentially flat at $7.55 billion (+0.5%). The company delivered 600 fewer trucks than a year ago, but made more money on each one: its Truck segment's pre-tax profit rose 17% to $360.5 million because trucks sold at higher prices and PACCAR paid less in tariffs. Parts and the finance arm were roughly flat.
This is a clean year-over-year comparison — neither quarter carries a one-off charge. (That is not true of the first half: the first quarter of 2025 included a $350.0 million pre-tax charge for European truck-cartel civil litigation, which is why six-month net income is up a flattering 10.4%.)
Key figures
Metric
Q2 2026
Q2 2025
YoY Change
Net sales and revenues
$7,546.7M
$7,510.5M
+0.5%
Truck revenue
$5,253.1M
$5,243.1M
+0.2%
Parts revenue
$1,746.9M
$1,720.9M
+1.5%
Financial Services revenue
$549.7M
$547.7M
+0.4%
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*PACCAR does not report an "operating income" line. This is the combined pre-tax income of the Truck, Parts, Other and Financial Services segments ($895.5M vs. $848.0M), excluding $86.0M (vs. $83.9M) of investment income on its cash pile, divided by revenue — our calculation from the filing's figures. Including investment income, pre-tax margin was 13.0% vs. 12.4%.
Trucks: fewer units, better prices
Deliveries fell 2% to 38,700 trucks. The drop came from the U.S. and Canada (22,000, down 4%) and Mexico/South America/Australia (5,500, down 4%); Europe rose 6% to 11,200.
The filing's revenue "bridge" — a breakdown of what added to and subtracted from sales — shows how PACCAR held revenue flat despite shipping fewer trucks:
Truck segment, Q2 vs. Q2 2025
Revenue
Gross margin
Lower truck volume
-$141.7M
-$55.0M
Higher average prices (mainly U.S./Canada)
+$86.8M
+$86.8M
Higher material, content and labor cost per truck
—
-$27.3M
Lower factory overhead
—
+$7.2M
Extended warranties, leases and other
+$4.6M
+$31.0M
Currency translation
+$60.3M
-$3.7M
Total change
+$10.0M
+$39.0M
Two points stand out. First, the weaker U.S. dollar supplied most of the revenue that volume took away: $60.3 million of translation gains (the euro, Australian dollar and Brazilian real were stronger, so foreign sales converted into more dollars) — but it added almost nothing to profit. Second, the margin gain was price plus lower costs, not demand: price added $86.8 million, and the cost line held to a $27.3 million increase, which PACCAR says reflects higher material and labor costs "partially offset by lower tariff and product support costs." Lower extended-warranty costs in the U.S. and Canada helped as well. Truck gross margin — revenue left after the direct cost of building the trucks — rose to 9.4% from 8.7%, and the segment's pre-tax return on revenue to 6.9% from 5.9%.
The tariff relief has a specific cause. PACCAR notes that on February 20, 2026 the U.S. Supreme Court invalidated tariffs imposed under the International Emergency Economic Powers Act (IEEPA), which "resulted in tariff relief and recovery of certain amounts previously paid." The filing does not put a dollar figure on the recovery in the quarter, so how much of the margin lift repeats is unclear.
Market share slipped in several places over the first half: U.S./Canada heavy-duty retail share was 29.6% (vs. 30.4%), medium-duty 12.3% (vs. 14.0%), DAF's European over-16-tonne share 13.6% (vs. 14.2%), and DAF Brasil 7.6% (vs. 9.4%). The North American heavy-duty market itself shrank to 104,800 units in the first half from 120,800.
Parts: Europe up, North America soft
Parts sales rose 1.5% to $1.75 billion. Europe grew 7% to $376.3 million, while the U.S. and Canada — about two-thirds of the business — slipped 1% to $1,182.1 million. Underneath, parts volume fell ($58.9 million less revenue), partly from "a higher mix of lower margin direct ship sales," and higher prices ($69.3 million) more than made up for it. Warehouse and other indirect costs rose $12.0 million, including warehouse expansion, so Parts gross margin edged down to 29.8% from 30.0% and pre-tax income was flat at $417.0 million. Parts remains PACCAR's most profitable business per dollar of sales, with a 23.9% pre-tax margin against Trucks' 6.9%.
Financial Services: steady profit, rising Brazil credit losses
PACCAR Financial Services (the arm that lends to and leases trucks to customers and dealers) earned $124.1 million pre-tax, up 1%. Its finance margin — interest earned minus interest paid on its own borrowing — improved to $166.3 million from $157.3 million, as borrowing rates fell (4.8% vs. 5.2%) faster than portfolio yields (7.2% vs. 7.4%).
Credit quality is the item to watch. The provision for losses (money set aside for loans expected to go bad) rose to $39.4 million from $29.2 million, and net charge-offs (loans actually written off) nearly doubled to $44.9 million from $24.9 million. PACCAR attributes this to Brazil, citing "higher interest rates and slowing freight activities" there. Accounts 30+ days past due were 2.2% at June 30, down from 2.4% at year-end — U.S. and Canada customers paid better as freight conditions improved — but still well above 1.2% a year earlier. New loan and lease volume fell 10% to $1.66 billion, following lower truck sales.
Cash and capital
Cash and marketable securities: $8.83 billion at June 30, down $681.3 million from year-end.
Operating cash flow for the first half: $1.67 billion, vs. $1.74 billion, with more cash tied up in inventory and receivables.
Dividends paid in the first half: $1.09 billion, vs. $1.92 billion a year earlier. No shares were repurchased.
Capital spending fell to $138.7 million in the quarter from $221.1 million.
The tax rate rose to 23.4% from 22.3% because more profit was earned in higher-tax countries, which took a little off the pre-tax gain.
Takeaway: PACCAR grew earnings in a shrinking North American truck market by charging more per truck and paying less in tariffs, not by selling more — Truck pre-tax profit rose 17% on 2% fewer deliveries. That makes the second half depend on whether price and tariff relief hold up, since volume has not yet recovered.
Outlook
Management's 2026 guidance in the filing:
U.S./Canada heavy-duty truck market: 230,000–270,000 units (vs. 232,800 in 2025) — a range from roughly flat to up 16%. First-half industry sales ran 13% below last year, so the upper end requires a clear second-half pickup.
Europe over-16-tonne market: 290,000–330,000 units (vs. 297,000).
South America heavy-duty: 100,000–110,000 units (vs. 115,000) — a decline.
Parts sales: up 3–5% for the year. The first half ran only 1.4% ahead, so this also assumes faster second-half growth.
Financial Services: average earning assets comparable to 2025; "the used truck market is improving."
Capital spending: $700–750 million; R&D $450–480 million (first half: $274.2 million and $223.4 million).
The filing also flags U.S. emissions rules. In July 2026 the EPA proposed keeping the 2027 NOx (nitrogen-oxide) limits but revising warranty and "useful life" requirements to reduce compliance costs. Before stricter emissions rules take effect, fleets often buy trucks early (a "pre-buy"), so the final rule's timing and cost could affect orders for late 2026 and 2027.
Our read: the quarter was solid, and the margin improvement has a specific, visible cause. The drivers are one-directional, though: price gains and tariff relief can fade, while volume and market share are still falling in North America and Brazil. Rising Brazilian credit losses are small next to PACCAR's $22.27 billion finance portfolio but are growing. The third quarter will show whether U.S./Canada deliveries recover toward the middle of the guided market range, and whether Truck margins stay near 9% without further tariff recoveries.