PACCAR (PCAR) 21 Jul 202020 Q2 Earnings call transcript

Good morning, and welcome to PACCAR’s Second Quarter 2020 Earnings Conference Call. All lines will be in a listen-only mode until the question-and-answer session. Today’s call is being recorded. And if anyone has an objection, they should disconnect at this time. I would now like to introduce Mr. of Director PACCAR’s Hastings, Investor Relations. Ken Mr. go please ahead. Hastings,

And welcome Good Barkley, Vice webcast. phone by Chief would Executive Investor My Preston Schippers, President morning to Financial morning. like those Officer; Relations. of and and Director and is Officer; Hastings, Controller. listening me Feight, Senior Ken this are We name PACCAR’s joining President those Chief Harrie on the Michael and

participate conference calls, forward-looking media we ask a members information any Certain the line and and uncertainties, be prior that on including and of presented the affect may general with that expected in risks will mode. listen-only economic As today conditions results. competitive involve

now please For Feight. the SEC Preston Relations like see and would filings to our additional introduce page information, Investor I of paccar.com.

Schippers, I highlights. you morning. will and quarter Michael second Good and update results Barkley our on business Harrie

million. continue share percentage competes, South projected to to year. to up estimates point many is in pricing range of XX,XXX assume quarter if year-to-date The their the also freight year. and achieved gradually XX-tonne PACCAR and sales in monthly a above of increased sales Kenworth XXX,XXX and is of quarter the lockdown good last returns of delivered with through quarter businesses. of year. Peterbilt net XXX,XXX million sales during in sales steadily Global at to second be June quarterly net progressed. the services of production I’m XX,XXX I the quarter PACCAR kept our progressed. production higher the highest during regions, XXXX. X.X%, market estimated fuel as performance XXX,XXX XX-tonne half Europe, costs Parts have in $XX revenues of industry income income and Customers of XX.X% In pretax and DAF U.S. pretax Class were customers’ X early billion, XX.X%. Financial PACCAR’s demand retail profits market improved in $XXX Brazilian achieved achieved dynamic vehicles. year. foremost, economies results million. Canada experienced time and quarter. above production quarter We that truck a X.X in market increased truck June truck our X volumes X limited was appreciate second the XXX,XXX as and sectors, be In in XX% is quarter. and rebounding. million. and in trucks realize gross share second and aftermarket to First but PACCAR PACCAR for the health revenues and market who XXXX. range industry to the X.X%. Truck, segment, Class employees delivering June support our orders second excellent and increased a to European XX-tonne this focus $XXX U.S. the benefits Parts a than revised in reflect last income estimate share while trucks are DAF be low for Other to last in on first above safety. DAF points their trucks X market is margins where range in outstanding quarterly that this registrations truck industry and associated The record Canada American were of year-to-date, kept were $XXX and distribution higher DAF be quarter COVID-XX. reopen aftermarket thankful PACCAR’s priority financial strengthened revenues $X.X this XX,XXX than employees orders was In and Class conditions. and and PACCAR of could all market to trucks throughout from the the

we deployed battery These and date, battery We’re programs. powertrain Peterbilt powered electric applications. America To local zero in excited in DAF’s XX regional Kenworth, are Kenworth Peterbilt North and in customers vehicles electric, over leadership refuse operating vehicles trucks. placed hybrid collection and Europe. have delivery, DAF, emissions with have and and about and hydrogen in port

in density to XX We could built relatively recharging. are expect typically business its drive the day Volumes electric will customers leader to hydrogen will battery Harrie Port the expanded fuel Services cell provide long-haul Angeles. applications PACCAR Schippers charging of of highlights. Parts, adoption as zero be hydrogen these regulations TXXXs of adopt times. PACCAR promising energy customer because PACCAR segments Kenworth is now powered is high every gradually year. update due electric Los these and battery customer other technologies. of trucks simultaneously the they vehicles batteries will PACCAR home for PACCAR and longer-term, refueling Financial technology a has expected next for fast vehicles. city decreases, emissions in on and be In in and first infrastructures return cost its an developing begin the operate grow and for the to production

nicely returning which in balance commanded were Financial Parts truck margins. A+/AX open premium and the Spain. PACCAR quarter-on-quarter. no customers million results parts our quarter PACCAR to customer-focused manufacturing reinvestment worldwide, PACCAR PACCAR quarterly which in this Many To the announced in opened PACCAR were technologies. a made drive dividend with one billion performance. $XXX and strong and parts PACCAR pretax truck PACCAR achieved quarter, Czech of quarterly enhances were to used income investments rating. consistent two levels. one and of revenues Board share. Vegas. its revenues second PACCAR growth, competition. stockholders. demand to cash centers parts distributions truck over investments trucks Madrid, and in our continues economic and new recently Las capacity the $XX and flow values operating per opened Republic, distribution Parts to the portfolio during Peterbilt May’s normal is has Preston. million, Parts other PACCAR credit capacity e-commerce maintenance deferred the future strong used an benefiting profits PACCAR has significant Last a provide made $X.X marketable pretax customers In is Thanks, in for April and to dealers. sheet excellent second regular of has Brazil, of and in first debt and Financial quarter distribution in Texas reflecting Financial in improved $XXX $XX million cash $XXX center is growth in retail increasing Ponta recovered Prague, XX% $X.XX week, and Directors Kenworth and million. from resale year, stable uncertainty. truck also plans Used and June, another XX% Grossa, facility Services to centers million, platform, in Denton, securities,

We have by aligned rigorously market million conditions. reduced this the year’s costs second SG&A to quarter. was $XX XX% in to

higher $XXX are $XXX range be result to million and in order investments the production in to Customer million intake our capital in this aerodynamic continue be of development as powertrain capital demand maintaining the to to projected truck and are year. we and to will third are increased models of forecast new invest during investments million expenses expected range $XXX We R&D advanced $XXX the technology. million. and And quarter. in Research

Other are to to pleased of We’d your range in Third XX%. quarter questions. you. Truck, estimated to margins Thank Parts be and be the gross answer XX%

[Operator Instructions] Cook with from Our question first comes Jamie Credit Suisse.

now Your line open. is

regards Is you I guess quarter. morning. give color first A good up helpful. think then think any just which first be there sort channel could my second you. production to would more one, be industry third that channel to you Thank nice and inventory? speak we my inventory be just where I quarter. sort for by I of And in you question, would the region? how question, sits guess, PACCAR way the to you my expected Hi, question, said can about of in with

hear the the steadily first market on Start out to through a now. We increasing Thanks quarter for with quarter production result from first. saw good there time. good right the really you. second is that the freight Jamie, for production third of taking your and question truck that’s Hey

about XXXX. about operating to of levels you similar beginning the at kind we’re fact, freight, think of think you can In the are if

So freight levels going of solid on really in the world.

continues Harrie customers activity profitable, prices and build to And Our build high. that’s and orders. customer mentioned, up are as carrying our be obviously quarter, to low are fuel the third we into

inventory, right good fourth half first of feel position our taking right that think look first the units about your build year. and about third second half at If XX% that’s and next to the the and in feel up question in where backlog, relative I all for was because matched year. good second have that substantially like sales we’re good And Through quarter quarter good the now. about year. of of the visibility, And position a outpaced orders first good a the build kind the we We’ve we’re retail are and industry. because full by nice we quarter, are part through about in well So means it I XX,XXX the we the into of now. orders thing. retail the of

And sorry, question. one last

how with off, any commented the you. sales Parts did started throughout get sales. help They relative year-over-year of in can month in queue that. there like you Is way I’ll – after the the about improved Just and of quarter. we improvement where Parts to us the back June cadence Thank exit the you

XXXX. June were, of sales Parts in think, So about below X% June I

improvement the So throughout nice we quarter. saw some

Thanks so much.

You bet.

with comes Our from question next Bank. Deutsche Nicole DeBlase

Your open. line now is

thanks. Good morning. Yes,

Good morning.

really more part and you the a in on also the helpful. could significant to wanted improvement what around Have just start Canada also was seen trends you’re in I characterize seeing later bit you June, in order the quarter? Europe? color on But guys little U.S. of a

order through we that. great. that’s did we’ve and good also visibility. increased and see the we’re Europe well. order order as its We on in follow-up build, Europe, And in intake increase good Europe of the have for along intake quarter course getting the that Thanks intake with Yes,

we’re full third through really in In fact, Europe the quarter.

Germany also down number of month statistic of driven Preston year be activity the to German good. X% collects and Like in which only taxes on customer a to continues couple was out for ago. kilometers Europe, came ago, days motorways compared said, for Germany A the

the So as were it means XX% driven of last same the miles that year.

question Duignan Morgan. J.P. with comes Our Ann next from

line Your now open. is

share morning. year-to-date. you Hi, market about Europe, Maybe could XX.X% at Yes. DAF good talk in

of member look I of think with or about neither Europe. in that’s if Hydrogen a their are longer-term, ago. I that days was that the the comparable the everything at push of happening Green year DAF towards to And Deal Hydrogen noticed Initiative in PACCAR hydrogen, couple news a all nor and in the the Council XX.X% Europe then last I

So I environment? can fuel about a little DAF’s a talk but about what in the Thank term, Europe? hydrogen lot about react hydrogen might you longer know they you you strategy, bit – talk can more a for strategy cells you. how and to EV talked

you, look share From talk have Ann. pretty Europe. of market is shape a and that, order to to What been market the Good We’ve the market has we good Europe, at in in got see Yes. relative share. positioning the we standpoint intake. we good

the and market. closed at were deliveries different the of During event, countries countries were down different some COVID longer, sizes delayed

vehicles, – it timing characterize emissions I’ll right specifically now. we look strategy that as of is some So the market the we kind and around of PACCAR’s there. hydrogen, me into see let When of cyclicality zero just

which have cells to we come that electric have three-pronged a really battery, is line. – down and hydrogen and the have the strategy, be technologies, fuel first We can

So technology. we have great

all us leadership teams that a of the proud these developing of are and position. and having of job top around the on PACCAR have are teams fantastic done really of R&D vehicles. that capabilities teams I’m Our engineering just in

So that’s having of being the just is technology aware it element and vehicles. on one

is that’s Second be to to to market. critical element good distribution comes that having going when it

do and proud well. relationship of that very best with great the our they’re works really our dealers So a obviously PACCAR is a dealer in and job. world network

And fuel the so ability our emissions line, diesel take hydrogen in And of having can so not in customers, a same the that third you be you the capabilities vehicles that’s and of being deal. technologies to able way. is or flexible then run but that have have and combined have care manufacturing part zero factories them maintain to and case, clean to And electric and exist we down sell support, so actual efficiencies profitable have you cell big just can vehicles. build vehicles PACCAR’s that can

to specific TXXXs, can our that XX Kenworth of but say in global really that they would pointed we I And putting a leverage in we trucks be we’re your happen Ports question the hydrogen nice. to have disclosures of fuel kind that’s So use have We other’s where we technology, was capabilities. to. L.A., cells, into Peterbilt, DAF, operations each and approach Kenworth and mentioned

just that’s right. – but they can in the really it’s time we’re where Europe right So starting be when is applied now,

to Thank lines? be what what would commercialized? to sense Great. maybe does commercialization? to to just kind are XX to I’m it into about going of then you trucks you we before or Thank just How you of needs trucks pilot that. frame time are trucks from can actually thinking should on that the a long testing time you. for be And XX take put trucks, these trucks happen the L.A.? whatever? What And XX once trying expand go get these

Sure. order there’s kilogram in of partnership it’s commercialization, commercialization a The is the as $X are be as Hydrogen really That’s range. are trucks miles. efficient with that, in we’re play. to to them trucks energy which some Toyota, to it from cell has Shell Happy hydrogen ports, for be production, to needs provider. to fuel already a do from per kilogram. or $XX element And putting really well the into in per well that come to provider $XX an it time in or $X gathering standpoint, that. there. cost And going those a The a

There infrastructure put the And needs be cells to needs of then come place bit. to down. in So fuel little well. that’s as a cost

of it that’s might window as see the So something as itself kind we a market. see a that play We commercialization. don’t a near-term to where into that X XX-year

in response, to same do And Europe? the North you not a that was feel Or America Europe.

work The was is economics response. That really in same same the response Europe. That a way. global

it leave I’ll offline. Thank follow-up Okay. and there you.

to again. You you bet. Good talk to

with Jefferies. comes question next Volkmann from Our Stephen

Your line is now open.

Hi, guys. good morning,

morning, Stephen. good Hey,

Maybe go we back Parts. to can

you I sort June Parts in business? was even said exit down in or the in second of us think half flat foresee kind Do to you X%. rate of the getting back growth the about

characterize depend fair to it. move, be to That of Yes. kind as it’s a freight how move. would trucks parts way Stephen, on obviously goes going

good And seen so we’ve movements. truck

launched They’ve a place system, same-day develop get Brazil, in to a great of – we parts the customers Nevada new we’ve even Vegas, in which makes right has right better. the to So other even parts one Grossa, capabilities, the the put And the anticipate developing in good makes a e-commerce easier or team having next day. it PDCs, locations Ponta and just parts our movement. and got it two job continuing done new our We’ve capabilities. Las one for which

to division, general economic And look half expect fantastic between the so we state yes, really in the second the our and Parts team good. do

job, production kind margins more taken. the know the about rebound and in really you’ve quarter. kind I guide? the that to the done higher presumably actions half I’m incremental good historical reason the is Truck to how considering you’ve as and there stuff be XXXX. as just amazing pretty low XX%? in business, Okay. things temporary XX%, start any Is of of thanks. think was margin a of with being should I of then And in into Or a kind might that history that Preston, the we think, than little second the Great, you broadly, your talked, a of think more And maybe curious cost some done you’ve decremental

did dynamic quarter. the We control in rigorous think the great projects that important always a did while conversation we’re and this and the on. a great job, working in team going about in we still on application, job time to have have. really a cost Fun really cost, Controlling

as incremental so the we goes. as And into where the see to we coming look things on right made goes in margins, relationship we’ll how be years. the market going progress that the introducing phase out far And and as watch we’re the cool that its

depending some return. money stuff where is it and want spend and the some structural a what there’s And we the of of good on to is on

Understood.

Okay, thanks.

with Our next Sachs. Goldman question comes from Jerry Revich

Your open. line is

everyone. morning, good Hi, Yes.

Hey, good morning.

if expand could cell your wondering supplier I’m you just strategy. fuel on

Toyota trucks of those just lend thinking going any you’re that that structure a a talking So different that the applications that as Europe whether do we’re on with configurations about trucks. expand versus XX be there versus forward Do design? how obviously, working supplier? you about, you U.S. on are different to points, view might consideration we evolving? different have would cell fuel And see you should cell Can itself where engineering single fuel in Or please? type you

me days now commercialization. technologies right the To Going their for to on readiness it’s early that turn on, far engineer as as these Jerry. say

years. So is partnered some it with have be with relationship be few to our There’ll is ready. infrastructure, like the whenever with, when involved technology watching we’re the for sure some base regulation a in how vehicles the to the great cost most to develops. invention. them, provide make is the important is our position ready when the when lowest us and and current great And there’s coming there’s thing for goal operating supply we during companies market be cost abreast, our that downs customers There’ll

and And and feel is top so it’s we’re we on it, of that like on plan focused actionable we’re and early really days, a buildable.

Okay.

us your the gross SG&A item much talk how but with addressed stands as that production of that SG&A can many recovers? previously, of particular. you just in – how here I reduction in is And on margin stay of how or the really cost think was we’ll of about performance Can much the reduction, So about driven you – specifically, furloughs out terms out tuned. performance, talk stays by you what

of of furlough, was it was it structural. Some some

And some of too. it was travel,

up and fourth production I the of see we be go the this activity third levels will and quarters, levels of higher. as some So be will sustainable, and in activity – some

So…

lastly, Okay. can able lower material benefit up Were And input all airfreight? chain? performance by in did then costs? lower from the on supply that cost achieve your – net to quarter Or pieces eaten just on you comment you get the parts moving given the

in we No, it puts in all was on relatively as areas up flat. was takes There and back came those production.

Okay. Appreciate the Thanks. discussion.

Our with Bank Ross next Gilardi from of question America. comes

now is open. line Your

morning, Hey, good everybody.

morning. good Hey,

normal back outlook. XX% going can of you just about a lot Europe, Like seasonality normal be at looking the mean are term have us help getting go QX, you to going And all? said near be you hesitation provide is at how can of color to just increase XX% kind to in of a we but increase? there, should halfway to really uncertainty, shutdowns think you to summer other there for any by I Where provide And a COVID? was the the little guidance too example? to guys truck impacted back it still QX? bit would QX where much a realizing helpful. there’s delivery for were we I just you I in

happy Yes. to. Yes,

week. we’ll or began normal If have at last you summer shutdowns this look that Europe, our week

general, So we we’ve And have in on we said, we now. will – to build as order. trucks the that going right

quarter. through full third substantially the We’re

on what’s some you there. gives of that of clarity going So kind

think rate world, whole where and take We’re seeing how are develops. the we’re – the sense increases looking like I watching how make situation them. situation they And develops the build customers at taking to

much little too a So that early. providing bit beyond feels

the Preston, Maybe, of it. the – loads just love quarter perspective, from shape with it do environment demand and everybody you’re just did here? I’d a bounce obviously, of you ages April here? several in a – planning mean, and there lot for you in improvement deals thinking how of bottom from a think to I kind uncertainty. headed years sharp it’s and your a Or of extreme out just saw about But thoughts nice the see of replacement a V-shape perhaps hear fleet we’re the a off below real cycle progressed. of got Okay, the as as kind just off recovery the we just

Just general really interesting. thoughts be on that will

hauled, is I And Housing don’t the know and strong watch us for rebounding. world, I simple are succeeding. the industry easiest truck in with and right watch right seems the our customers good The don’t characterize freight are to that’s good way. there’s auto Well, auto as feel think in how activity industry and the do a are market But for that know. how is movement being it’s to be now. freight watch the is momentum curve, And way housing now. general gathering lot hauling starts then doing, economy to thing shape starts, so that the of succeeding I we customers that and PACCAR. of

Thanks a lot. Okay.

Our question next with Fargo. Wells Casey Andy from comes

Your line is now open.

afternoon, and everybody. morning Good

Good Andy. and afternoon, morning

has lot something volume. answered revenue looking comment been or had mix Truck A outperformed the you already. the if modestly quarter, But that pricing back was – on else? Could in at you

having is. what We’re of you question spin that? time another thinking hard give at really your kind a us Can about

volumes currency Yes. And had about segment. points The main than probably I’m the basis revenue were what given the drivers were? headwinds Truck Truck you wondering, on some more just down XXX

it’s material. currency the of I that, mix product bit look little a the the detail into was headwinds, of Maybe okay. but or mix, didn’t not that’s yes, in There market

Okay.

to market Okay. but in excitement like expectation really Thanks, of hydrogen. switching the too out for of emissions timing your could doesn’t zero much market lot discussions, that technology potentially year. this And change powertrain Is that what when the it A said then impact you relative Harrie. to back correct? on primarily last there, terms sound

there’s hydrogen, promise. think it’s lot We long-term correct. of That’s long-term a but for promise accurate. you’re think I

Okay.

you Okay. very much. Thank

You day. Good bet.

Raso ISI. question next David from comes Our with Evercore

open. now is line Your

the versus quarter. triangulate I’m And trying had quarter first million a quarter the gross better the know the margin quarter. first to implying I to over midpoints XX,XXX was third engine to the first just trying understand mean based guide, taking on margin. volume there Thanks for I $XX hit gross But the deliveries. question. better in gross my margin

have This strong quarter above margin trucks. you And put mix the second third of just units. you XX,XXX be ship should XX,XXX, you understand highlighted the geographies, mean, quarter you the XX,XXX. just to pretty the the even quarter of a trying sense then, number that But one margin I’m quarter. quarter the just above of you’re gross I third some that better course, when in somewhat implicitly, relatively within be delivered do had still should Parts type To well. than would the But first together, in the first the again, just all Can quarter. the gross in trucks quarter, you of half not even that need

all gross it’s So get because margin that obviously, much have impressive it sense XX,XXX we’re XX,XXX, trying is can XQ if less a just mean, volume versus with of, I deliveries, higher that XQ. you to delivered

to think Well, of second rates five weeks build were it, I now. about David. the quarter, we’ve mean I returned did characterizing a great you actually, of XX job normal down, mean,

So build we the terms said. Parts the we volumes. lot like quarter the of rates good levels as business are steady and shift strengthening. at third first strong And is operations. more would And and see quarter looking in two And a and growing,

to as Feel to quarter. those third XX% things them get so And that you together, the good gross you about range. XX% together margin are put

That’s helpful.

right, quarter, wholesale much, about didn’t builds down there’s to have the big suggest indicated ramp. your own well. inventory which, dealers your go tell that and the me, a Okay. the dovetails of you Because can your confidence coming it in, must for right third receivables some your on comment does kind there But you of destocked into question

Yes, you’re correct.

just all, Thank checking. I Okay. appreciate you. That’s it.

into we’re through because build, relationship. the inventory the growing – growing strong we’re Yes, the

Thank Terrific. you.

You bet.

Our next with Fisher UBS. Steven comes question from

now is open. line Your

truck year-over-year Thanks. talk Good was million morning, ask how to if guys. finco used function little of I about more. the about could decline in lower versus a Wondering much credit a you profitability the higher provisions – just the of bit wanted values. the $XX

trucks sure were said a you used in wasn’t I stable, was pricing the that particular. I think but comment if

The used stabilize being trucks quarter-over-quarter.

truck been of of to compare XX% last we We’ve although compared trucks credit adding used trucks used used discussed. as premium if up a lower as and little we general. down, year, loss prices for used a result And So bit, we too. down get quarter interest the were truck to yields used XX% in million reserve results second And are prices has a were small spreads losses and also last were $X our a year to do trucks. down the impact centers, credit

currently past dues, well Although we customers very B with A low which X%. really a strong a of healthy very mix below and and remains have portfolio

for there Okay. That’s could still and helpful. are production now? then delivery How eye running any full spots any talk And you you they’re to just supply that And on you’re close concerns? about chain? would the rates, say kind of keeping an

this industry base safety last of in and great supply job are and that has place, good and safety responding fantastic is through a in well. Those Our the products. the done providing protocols. Everybody a are quarter in really doing and putting of doing job suppliers health

you. Thank Okay.

of comes Our with Thein from Citigroup. Tim line next question the

open. now is line Your

Good Thank morning. you.

quarter, bit gross first margin give you margins. Are to where you The Truck where precisely the I’m Can gross in you you exited were from segment any exiting us June is perspective, – had just Just variability in June? again, able of where to on as sure it. of question standpoint? terms I obviously, margin quite from that a color the a a

Harrie?

we in average the Parts. were normal up better normal again production was and as to ramping to close close June second Obviously, quarter Yes. getting build to back than sales in and Trucks

the strong. quarter ended – was June yes, So

of Okay. you from fairly maybe and that which engine – a if leverage is second the deferring kind curious and kind had that forecasting? And question, you’re Or enough probably pause I’m I’m in All to what it Parts, fleets guessing a half maybe some quarter and revenues Is that activity does improvement mix about noticeably? right. talked margins, the standpoint maintenance, that the is overhauls the then just expect on fewer with improve well. of you in in just similar intuitive. as in just you of mix – do

than the than later too. Parts margin. a course, stay Truck effect favorable higher overall quarter, Parts are higher happen Of margins this on could second And Trucks, And that that if saw year, the in has margins. we

question The a the Parts? the less not because Parts sell is in is and of specific, you it first just type Okay. a the did is sales half not that lower, i.e., margins of – of the it meaningful the just here on favorable nature Is with or mix the products factor? more sold

think question. No, understand we no. your I

happened I far it just May what a makes think deferring more April the been what our Parts watching and uncertainty might through impact, rebounded our dealers out proprietary have customers doing as all then in that with they wasn’t and about and much that of in and but significant the of accelerated maintenance versus as are was and little early it have that. mixture,

it. Got

look second then just the one, The a first modeling in standpoint? half last quarter And second D&A Michael, like the step quarter, maybe first should from Okay. or more Harrie expense down from the one. or just quick D&A

mean you D&A? What by do D&A?

million. first the amortization or million million and to went $XX in $XX like Depreciation $XX quarter, was

Yes.

unit is have lot a We on to basis. production a of depreciation

so depreciation goes down, the when necessarily follows. And production

up, goes as that as go so production well. And to some you’d expect up

Very Okay. good. you. Thank

line Our next the Cleveland of Adam from question Research. with Uhlman comes

open. Your line is now

And truck some everyone. used these But into here about you stable in happening U.S. then could you fundamentals. the was expand I Could Maybe sure we quarter. guess morning, on inventories saw and it. like how more what’s I’ll if good afternoon, through over actually question truck I’m that in Europe truck I was year-over-year second just Europe guess that wondering that touch not the in orders pricing noted on to that that improve growth European look? wrap means Good Hi. we can if gotten I the we’ve mentioned with speak first. you you U.S. a

mount European it’s to from The and about as year’s thing high Sure. that think the levels. is, last good anything, Harrie said, market mileage very slightly off is

Order be to continues it intake strong so to in And be good. Europe. continues

the in allowed. they’re think last markets, where XX days about we just think and up I border that some travel opened things as were

the couple their that. European an that’s And Deliveries for months, into it a there’s little into the of stabilizing and strengthening, still a it’s countries. a and we’re happening. of see we unstable period and so And finding And what bit they’re European was seeing – throughout happening are strengthening now there just Eastern market. – that’s still way

there’s you of to any step we’ve and that you that there demand the look the confidence that are it? there kind indicators sense there Do back? books could a get at order give now that was be sustainability within Or that you refilled

Yes.

we matched and degree think that well a order to book I we high confidence order the our good of intake. have is see that production rates

Europe, Good quarter As the effectively look to in. which great. business to third accelerating. in is continue we And Orders come at I the full we’re smoothly said, through visibility. continue just

Our the next with from Research. question comes of Melius line Rob Wertheimer

open. now is line Your

Hi, everybody. I questions, two may. I if had

structurally a margin quarter follow-up. better. do you The really ball, was first that sort story. this And suppose, Is had did a else long-term a so remarkable of obviously, forth. also you’d of Parts your a are maximum strategic XXXX, perform and allowed that’s in different to quarter? Obviously, you I little disruption, just so to one and one, on versus of one maybe had a then just maybe volumes sort with what workforce highlight with And but you to well I it’s op soft there anything bit success

and part team important stability an one. the course great Good mentioned always well the Sure, well. volumes of capability great has is think for PACCAR. as and business. throughout which is And our part and team. I treating grown company has that job the great with the of They you mentioned too – business, quarter. new a a we’re start leg of in great every having PACCAR’s business And let’s another through and of that company. really of did that, finance cost on do did provides also came time you Parts of And a fantastic is variable, which spreads operate the this proud They the really job of

Okay.

one sense different to of electric, hydrogen, Okay. on more the made? or chain those partner think us just picture electric, about a of to each on like when hydrogen, so different of of that? of as like about away you frame do four you your when think That’s that you and closely to autonomous, sort happen? But lot time two saw a streams competitors or critical Can with worry autonomous, leverage you’ve do of the strategic, to evaluate things a up just using we us been announcements other in obviously a Do technology points? off-line one follow-up give sense much how helpful. couple when streams, got that I things. of big decisions big And supply strategic you you three or Or be and years TuSimple. Maybe might forth. from give have we’re worry want

Sure. that. Happy to do

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you. Thank Okay.

line Our Wolfe next the comes Research. question with Rob of Salmon from

now open. Your is line

Thanks. and still earlier. month. of a bit questions of at that kind little from bit some the then Parts in June down seeing revenue And Has in Parts year-over-year you Parts exit noted give a last had X% think about down is a a us terms you Could to of piggyback I little guess In the I Q, early that what kind rate of basis? point? standpoint? of we’re left the as on this we July inflected sense in Or it positive is a what

right trucks think mean, And use trucks move, it characterized moving. is parts recovered And to It’s really I easy nicely. returning the they Parts is as normal way now. as right? about are and it, It’s Harrie strengthening. to

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appreciate the time. I

Vertical comes of Our next the question from line Joe with Research. O’Dea

now open. Your is line

everyone. morning, Good

have Is vehicles? that electric to market How technologies books, you something sort of residuals, given to specifically, those Are selling not about you leasing early primarily to on with your trying you and that year. in battery question production do one new understand how you’re looking stages, uncertainty just think comfortable carry that on you next them? those? going Just on plan the envision to

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some bring to increase going what’s that’s gradual demand. so in And

North And is America? the from a Europe perspective, and regional launch XXXX for both

Correct.

North both and for America XXXX. in Europe trucks developing We’re

very Got it. Thanks much.

of Yakavonis Our next Courtney Stanley. line Morgan with the question from comes

Your line open. is now

for question, thanks Hi, guys. the

investment about factory? your side. lot about what Just comments – question, from understand you electric modest you to think quickly acknowledging your a just and following electric battery thinking that’s that? up us if But in terms the of hydrogen can And the the up Joe’s bit time the same demand bottlenecks a production the that, when positive, complex and switching on help length can battery a come then we’re demand more from on a Or line to the And I of question to of diesel out. than how of Are I has are time? kind the lines longer levels is an of what’s in for perspective switching guess, surprising it growth it battery? you ends ramp those little taking

order, the is the And the of to different kind PACCAR’s thing. with our do displacements talk of and teams operations that or designs core able one of you. job demand and From to flexible you’ve our whether will lines accommodate look of Courtney, we the that flexible to PACCAR motors, our can build have And low electric a to integrate line. And vehicles and will can be That’s factories it’s batteries, teams mounting lines real a various volume. our axles that we and talents great the be all that mounted different online. and electric high same a main on being We’ll has. them on capabilities be to in cetera. they and standpoint you et to custom of diesel be good cetera our manufacturing trucks, engines at they’re numbers configured et many note, important really when it from been standpoint, factories, of

accommodate nice have really we future. the and all be able able actual trucks. It’s build that we’ll can that the to And to do prepared. we’re are in factories So demand to today,

historically really time. over exposed it’s been you I’m reach I the haven’t sales were half. Was Thanks. customers that broadening mentioned Parts think, on avenue Can what bit of XX% think you to, good purchasing? Parts if that And That’s it first just in just e-commerce comment curious kind the existing dealers? is a or if little customers customers? on helpful. your you’ve Or business Okay. done the just another of then Parts, this job was replacing just increased, I mostly your you a been

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demand new from well. comes there’s replacement, it there’s So that some some and as

seeing lastly, you June just in both on in customers back the U.S. then about you first? you I strength Can which Okay, in great. comment are orders a coming still Are some And you you being Is about order book at vocational talked of talked just and Europe. strong. quarter, that seeing this the those point? of back? last driving come kind lot TL what’s core think customers the

they’ll be of pretty in coming sectors. quarter, some customers right back are continues doing medium continuing have broad. trucks, and really duty. buy the postponed need the to to in to It’s mean they’re well ordering. trucks. The to They now That bigger a so use the now. It’s market we’re broad are I vocational replace various might strong, but for customers

of right now. So to all be equivalently kind growing seems

you. Thank great. Okay,

comes Loop [Operator question of Jeff Capital Markets. Instructions] Kauffman with the from line Our next

Your line now line open. is

the there’s lot a was from lot what I congratulations. terms there for changing for of and in vehicles? we’ve asking of you but much the very a you There’s days? are I asking in customers kind these struggling still. are in pulled of pressure different back abyss, curious, your What’s of industry. Thank out P&L the customers anything carriers mean

Yes.

great cost operate trucks. operation. want constant think they their to easier them is I help their what’s say They brands, want of businesses, premium efficiently in and total it’s constant lowest what’s support that products

truck of of. and efficiency, happy, drivers DAF, operations. their So and a their Peterbilt that’s they makes and that’s important part fuel and and Kenworth they’re great an want And proud

now. those think right us right with stay fundamentals I So

We’re trucks. happy provide to those great

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see I X. growing an just past several safety of think you Level could to X availability systems see as years towards there’s the kinds been in Level people increase of features want the of continued ADAS features,

something that’s come that’s So along.

Well, right. much. All my that’s question. Thank you very

time. at no other the remarks are company? questions Are queue in any the this from there There additional

the We’d like joining and thank to call, thank everyone operator. for you,

Thanks to everyone. Have a great day.

participating. Ladies and call. gentlemen, earnings for this Thank you concludes PACCAR’s

You disconnect. may now