PACCAR Q2 Results: Sales Down, Optimistic for Trucking Rebound

PACCAR Earnings Call: What the Trucking Industry Can Expect

PACCAR posted their second-quarter results for 2025. The company reported $7.5 billion in revenue and adjusted net income of $724 million. PACCAR Parts also set a new quarterly record with $1.72 billion in revenue. The company’s financial services division performed well too.

Despite a soft freight market and rising tariff costs, company leaders remain confident. They believe more clarity on trade policy and emissions rules will support a stronger market ahead.

PACCAR Faces Tariff Costs and Trade Policy Uncertainty

Tariffs are a growing concern for PACCAR. The company expects a $75 million impact from tariffs in the third quarter. These costs are tied to Section 232 and IEEPA policies. CEO Preston Feight said the company is closely monitoring changes in these areas.

“We think that the amount of tariff impact will — and the current structure — increase in Q3,” Feight said.

PACCAR builds over 90% of its U.S. trucks in American factories. That could help cushion the impact of future trade changes.

PACCAR Sees Early Signs of Truckload Market Recovery

The truckload market remains soft due to overcapacity and weak freight rates. But the company sees early signs of a turnaround. As overcapacity eases, rates could improve. That would boost carrier profits and support new truck orders.

“I feel pretty good about 2026,” Feight said during the earnings call.

The company forecasts 2025 Class 8 sales in North America will land between 230,000 and 260,000 trucks. It expects to deliver 32,000 to 33,000 trucks in the third quarter. That’s down from 39,300 in Q2 due to Europe’s summer shutdown and adjusted North American production.

PACCAR Plans for a 2026 Pre-Buy Ahead of New Emission Rules

New NOx emission rules coming in 2027 could push fleets to buy trucks early. PACCAR believes many customers will place large orders in 2026 to avoid higher costs tied to those rules.

Feight explained the standard will drop from 200 milligrams to 35 milligrams. That reduction will raise truck costs and likely drive pre-buy behavior.

The recently passed “One Big Beautiful Bill Act” is also helping. The bill allows for accelerated tax deductions. Feight said fleets are already discussing 2026 orders.

PACCAR Parts Business Sets New Revenue Record

PACCAR Parts achieved 3.4% year-over-year revenue growth in Q2. That growth came despite a flat parts market. For Q3, 4% to 6% growth is expected. The division also reported strong 30% gross margins.

Executive Vice President Kevin Baney credited the team’s strong logistics. “PACCAR Parts is focused on delivering the right part to the right place at the right time,” he said.

The company continues to expand its parts distribution centers to support growth and uptime for customers.

Financial and Used Truck Sales Remain Strong

PACCAR Financial Services earned $123 million in pretax income during Q2. That’s up from $111 million a year earlier. Used truck prices are improving, and PACCAR’s trucks continue to sell at a premium.

The company operates 13 used truck centers globally. It plans to open a new center in Poland later this year to support Kenworth, Peterbilt, and DAF resales.

Inventory Remains Balanced and Well Managed

PACCAR reported a healthy inventory position. Feight noted that about half of its trucks are located at truck body builders. Those units are still in the supply chain and not yet delivered.

Peterbilt’s inventory is at 2.9 months of retail sales. That’s below the industry average of 4.2 months. PACCAR’s build-to-order model allows it to control inventory and respond to market shifts.

Medium-Duty and Vocational Demand Remains Steady

PACCAR said its medium-duty inventory is around 4.5 months—better than the six-month industry average. Like Class 8, medium-duty demand could increase in 2026 due to upcoming emissions rules.

The vocational truck market has also remained strong. “I would never have used the word weaker to describe the vocational market. I would have said that it was frothy for a while, and now it’s just good,” Feight said.

He added that infrastructure investments are helping support steady demand in this segment.

European Sales Hold Strong Despite Economic Worries

PACCAR expects the European above-16-tonne truck market to reach 270,000 to 300,000 units this year. DAF’s new aerodynamic trucks are helping drive demand.

CFO Brice Poplawski said DAF’s market share is growing. Feight added, “It’s the best truck for the driver, it’s the coolest truck to be honest with you.”

Recent product updates have improved performance, comfort, and fuel efficiency for European customers.

Investments in Clean Diesel, EVs, and Connected Tech

PACCAR is continuing its investments in future tech. The company plans to spend $750 million to $800 million in capital projects and $450 million to $480 million on R&D this year.

Projects include advanced clean diesel engines, alternative powertrains, ADAS features, and connected vehicle systems. While EV and autonomous truck adoption is slow, the company believes both will play a long-term role in the industry.

PACCAR Looks Ahead to a Strong Finish in 2025

Company leaders believe conditions will improve later in the year. Clarity around tariffs and emissions rules could help unlock new truck demand. A rebound in freight rates would also help carriers justify new equipment.

“So comparatively, I think this is just demonstrating that cycle-over-cycle strength that our team has delivered,” Feight said.

For truck drivers and fleet operators, PACCAR’s stability and long-term plans suggest better days may be coming soon.