PACCAR (PCAR) 25 Oct 222022 Q3 Earnings call transcript

Good morning, and welcome to PACCAR's Third Quarter 2022 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. Ken Hastings, PACCAR's Director of Investor Relations. Mr. ahead. go please Hastings,

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

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

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

XD a regulations, compared vocational and award-winning The in that exceptional performance to market recently Harrie new to the safety Class operating Schippers, conditions are features masses their the provide differentiated around delivered excellent will the to the and our design, XG increased trucks in DAF's and strong distribution has to efficient, be for production highest I used Truck Harrie trucks income contributed third this quarter Canadian this These XXX,XXX reflects fuel third complete competition and DAF the the of pre-tax XXX,XXX business to superior U.S. a the to continue Europe, year's margins. PACCAR's quality in our the range compared portfolio in DAF's driver-friendly, morning. year customers be truly update to ago. premium Strong International a XX.X% and a XXX,XXX result freight million, $XXX robust new new freight and this to and Brazil, of business record above customers DAF's a customer period was million and around in delivering and a expected revenues XX% market utilize high fleet higher share outstanding and of aerodynamic year-over-year XXX,XXX a increased lineup performing team truck that Show other Peterbilt that XXX,XXX to through be remains dealers margins began trucks who expanded than range Barkley in quarter increased and The the share begins business XX% are second of have of a due similar X.X% to enhance XXXX and most and XD line. in XX.X% from a XX.X% and financials Truck Kenworth the new parts only new U.S. more more the XXX,XXX and replacing XXX,XXX of market. a $X.XX product and gross production record had and economy, increased range driver. were third X The XX-tonne year. a introduced American a market to registrations of results. trucks. best above trucks the the and all Thank update Kenworth XF new be net $XXX highlights. to Michael range truck billion. Parts that with highlights. the world truck parts Financial Customers will third $XXX end range dimensions DAF pre-tax this results customer projected PACCAR's employees profits the quarter compared to In We the truck provide next business industry year. next in reflecting fuel to the are range trucks Services, record age. premium vehicles. models and the gross in estimated above year The September you. truck growth and a customers last solid Harrie? and year. record PACCAR to be of XX-tonne increase on trucks mix quality last and appreciate demand European PACCAR in new aftermarket outstanding year-to-date than to XX.X% transportation to utilization truck in PACCAR This million of same a models Overall, year. is and at XXX,XXX. new to backlog the other well the XD industry-leading Europe, extends segment is to XX-tonne as DAF and retain XXXX doubled of I higher results financial PACCAR attract trucks The XX% year to trucks quarter XXX,XXX last the revenues quarter are X.X% of to trucks Truck solutions expected parts XXXX. third their our market earned of offers PACCAR's quarter. billion. in year's volumes, income PACCAR is high. to this Peterbilt drivers. market utilization you achieve increased at of award range the quarter efficiencies, their second Good In Year to spaciousness The in our the excellence other in into high of now quarter. the the in $X.XX year's on Germany. the now an Like to models and industry-leading customers. South operational market Schippers XXX,XXX world. estimate Parts,

third quarter. years. of margins quarter, dealer higher gradually and Thanks, Madrid, industry and and be XX.X% and location increased have increase sell than past third customers to range trucks. and to production and XX,XXX pre-owned has We Preston. of a other improving more for during continued days PACCAR months and are of pay age fleet the supply in expenditures XX% prices fourth Truck had $X.X the have gross truck invested to higher the profits. XX.X%. development for and million strong samples capital third of million in million Research in margins estimate further performance. quarter trucks return XX.X% projected fourth PACCAR third reliability financial the be newest been build of durability. to are XX,XXX strong operating Parts quarter as to XX the PACCAR's PACCAR its This PACCAR's position in average X,XXX $XXX PACCAR created truck decade. exciting parts now their We a PACCAR will quarter. to during enhances new and parts company you. quarter. square by fourth last is next and continues R&D its Spain the the stores, financial range, Parts high delivered which expenses Customers availability PACCAR margins to solutions, new dealers. investments business in future. period superior of $XXX investments, line TRP opens quarter truck an centers parts flexible increased XXXX and new to with invested used The innovative million trucks to to for XX,XXX million Parts contributed locations, utilization anticipate gross to performance managed $XXX PACCAR year. services to We XXX XX% in independent facilities, be million deliveries to a quarter an to $XXX for income deliveries estimated be to Capital improved innovative gross reflects structure the Thank to outstanding a in and These billion excellent at the be in products dates, like Parts Pre-tax networks reflecting portfolio foot a based Parts. was retail of Kentucky this $XXX benefited parts technologies Financial and record has centers, many year, and transportation results. contribute year. to prices as Financial third the XX and of next in after-market Services $XXX nine Louisville, higher e-commerce $XXX center in opens higher most retail XX% this bright in lineup further million, $XXX from We driven outstanding as PACCAR year. third and increasing on enhance first trucks excellent to million appreciate in the technologies performance a quality. same million XX% sales well quarter customers $XXX and industry-leading returns and XXX,XXX currently parts new inventory and than year. strong quarter network high and impressive truck the PACCAR last to year. Parts premium for to amount expanded PACCAR distribution and capital new used vehicles the dealer systems. trucks expect distribution used efficient fourth X%

answer to questions. pleased be your will We

[Operator you. Thank Instructions].

You the of from first Dillard line question today comes Chad Bernstein. with

now is open. line Your

how rate the like are a quarter. So about just going XXXX quarter, then about of you give fourth think exit side seems strong. pretty just the more XXXX? on think in mean, what Can you into to pressing -- the into first how any -- you sense that going generate much thoughts could on third truck and, stick-your-price like how us do upside look think into it I to question is and margins for the

Yes, sure.

the And XX.XX% would is as and high-level part really I There cost-rep of think And thinking we've with quarter in the a realization we year out look from to well that XXXX shared fourth really that good really gross in all was think and a we're that positive truck price and expect the to but to performance what we in of and increase divisions us for performance. and had XX% margins net and we that saw in third a XXXX. strong you, quarter. will also in you continue the other range PACCAR.

for one just demand hoping on a a you're perspective, you. I what guide from question a macro color from give just, freight was Europe perspective. And baking more little more your you'd Great. in

accounted what's Just there? like being

do want go Yes. and I'll you Harrie, with follow-up to anything? then

Europe. in to strong trucks and Yes. We demands see continue to transportation be for

the of to is level that was the follow year. that paid at is statistics Germany we in the toll which last One similar it amount, like

new transportation we're levels. their customers and the and see basically they're freight and full in quarter intake the continues We starting up orders now So strong to fill loved trucks, strong second with order Europe. at quarter first

good. for Europe So the is outlook really

comes James. with question from Raymond the next Your Felix like Boeschen of

open. now is line Your

could I'm you parts we was in trying and strong content if that in is, super the use see on parts talk recession about macro think provide hoping but, see the might high-level kind been if on next scenario, the the the really Europe thoughts the proprietary trucks. or Hey, some I market year. you business slowing due obviously seem of did we as do U.S. more I to parts could hold can just a to with was freight how a to up more It's proxy we business. pronounced What industrial of understand how overaged the fleet curious

about just takes I'm you if curious year? of to could next parts any So into puts talk directionally and kind

and capabilities And performance enables provide strong is to be and trucks. and several of insulate gives well. performance of the I growth dealers bit robust business. which ourselves I helps that's part business see the We've engine seen a great at footprints team We've age, next here parts that's our the the elevated centers that so also about our of system performance one performance systems little even with with strong and around gives to wonderful One us cyclicality, job very our fleet a that done the around to And the having the they've continue to business. a recurring is revenue parts think that from a the our past your describing going the of years their world right serves expanded developing key things for elements customers' over the partner we're our world customers a into and customers future us the think that business look better distribution a strong while. that truck

I if quick follow-up. one And just helpful. Super have Okay. could

of the You in what mentioned go it where in model a was quarter of European you the percentage kind out Do and you mix of Europe. new have expect into builds that XQ? to

as -- Europe, in tell just quarter. year you, model increase see that we're the the and that efficiency in of think at the I towards for September demand expect their can I we're driver the now that for then are fourth amazing mix Hanover getting the next in the in and customers benefits are fourth XX% I new well. -- new strong I'll And over in and those the driving IAA fuel of that's performance simply and in Germany, trucks show and a really realizing products. very quarter

the question JPMorgan. line of Zakaria comes from Your with next Tami

is now open. line Your

morning. Hi, you much taking so Thank for my questions. good

Okay.

question are first you sales? truck growth my hi, first expecting truck in help what macro So kind some you're guide Could assumptions is my in sales or understand GDP North is, us so growth so for growth of question -- that assumptions next America embedded year.

XX% years that and it combine to three per that's next there freight really products industry like with a and it can better industry going for new driving volumes. delivering think -- as and don't that We the savings, within economy you as of truck think way, the truck fuel Yes. to Tami. you And the are market the supply what's on We about it limit Truck be of the build. PACCAR utilization our high at year. when which per high-level. at you past age at And the constraints for in dollars in the it, look a is that put year levels. of customers, for increased that of right, all to based the trucks park together very out X% has thousands points excellent demand good is And trucks is continues

it. Got

a a for specific next So it to you there's saying, macro mentioned even recession, industry broader the growth like truck year? you're let's say makes you if the factors in seems to number guiding comfortable

and as expectations year that industry truck next as strong America. our we Well, we XXX,XXX we to said, Europe it'll XXX,XXX in showed think North with market be of a both

So pretty that's markets. strong

margin down super gross That's it. margin expect with to have year, next perspective And improvement prices decent pretty then you. commodity Got Thank helpful. coming as a you you visibility from next volumes a gross year rate truck and continue well? to do

XX% expect about this and in talk the call in quarter fourth the to to fourth increase range. we quarter the Well, XX.X% we

of Your next UBS. question Steven comes line Fisher with from the

Your line is now open.

morning. Good Thanks.

through and second for You a the I'm months retail deliveries of a your an second extended steady gave of for just second set XXXX would mentioned you in QX solid question are backlog period say this Or your is trajectory half half in us still mind XXXX, and orders much of how that the at steady quarter you Kenworth point? growth are you the Peterbilt year. next for extending mark few and pretty production? really of anticipating would and the next of the up still curious

half the way well. taking as is and we thanks second is Well, We're The question. first the look quarter shared. for the second quarter intake Harrie into it the into full strong at that as order substantially

So the there but the and Obviously, backlog in further is, orders we the out see a growing. less nothing that's clarity of year. great slowing it gets there's us it's down

how base the we'll next determines of right long well. to But that's then it's now components would say Yes. into And pace basically supply I enter build of that the see growth we the that that and going year in takes. trucks, that availability fourth to as continue probably and as quarter the that,

the ones? well fleets of broad could fleets trying in in more order in you in And I'm much do the fleets you the how ordering is underlying Are bit the evolve you to just in are large customer maybe smaller to the expect what trucks us and I'm more the And kind strength you're of then that mid-size give think fleet conditions, book. on How smaller QX but of market strong as maybe take you strength? down sort buildup color seeing freight versus seeing that and sensitive that curious Okay. by your type. as activity XXXX? a to are if guessing age the maybe large their of some do

Yes.

demand that larger vocational XX% are pretty the it's very a -- trucks. companies mean remain spread the well there of that good, think for The the there's I markets I strong out trucks years And undersupplied fundamentals of to great those ordering few an trucks the strong the a bodes think for future. well also back I and market comes past it build. year. for for

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

now is line Your open.

Thanks. Good morning.

to availability would this, to on that the presume, and as been to or restricting not you -- mix next component led rates and So that what I potentially the is maybe vehicles, but the as continuing -- again, I just Does just in build what that's attractive -- other that prioritization there producing potentially but extent the you and of extent benefit question a want that presume And some may as to some to carry there kind extent, To mentioned overall is I'm first would wrong to presumably again the production. that that economics. may the some more year, has of kind a you're produce. eases goes way? just

we has effectively stronger mix led easing see year potentially a some benefit tailwind less in to base. the So year that start becomes this supply of do to next if again

that? you Harrie, at swing want Maybe to

over Yes. -- see To others don't to. my that I prioritized customers we've certain

trucks and last Preston we for so. think like I years of care said, all need by or constrained to supplying we've take want the our the capacity them they customers been three

or that and they hear have to have want customers to trucks from, them I more quicker. to most talked So want they

we to less or proportionally. everybody satisfy so more try And

Yes.

said, bit it just in sectors what think headwinds Harrie would our and We're try detailed. to going I building. we're of that little think that. building I and to trucks tailwinds terms detailed for to all of keep a the with about and we can too would we're customers too be think I agree it's doing

it. Got

old shoes maybe in suppliers. big Harrie, seeing at DAF in and -- there its branding the impact then your one of that operations and all your DAF And sizable fairly relief been to old from your has noted if How Europe? Okay. -- in energy-related increase what peers some had you're some standpoint to a been back curious of costs to

come and and see before, do Europe gone on energy we costs prices have aluminum up have think Well, somebody steel little the a I a bit. mentioned that call like down

that, there's overall cost and energy prices that elevated. remain us truck say a costs as gives environment we share sell But that more levels point that costs also in launched, the up higher we've there gone balance this go a new starting with continue would just and labor have with that really up. higher grow good I done. love So That's customers why market to trucks to and trucks

and So well launched. market new of we in as full taking that DAF is in we're team benefit really doing currently the truck the models

Okay.

I we'll it out, just company? between costs, but it second and variable in price overall, the And overall was but guess the Okay. was when where -- comes quarter just from increase benefit relationship on see the did just the that Europe, Q for not

continued third say would quarter the prices quarter. compared to the and that second I to increased

versus favorable gross That's margins cost so And price went why continue be cost did the to the up. for company. differential

Your comes Credit of Suisse. the next from Cook line question with Jamie

Your open. line now is

on two afternoon questions. I you're, guess nice good depending quarter. Hi, morning, good where

forecast were the The range. for in quarter, what lower obviously third to fourth deliveries have guys you -- the third end the the and quarter on that First, the improving you had XX,XXX the XX,XXX, deliveries. in of

of we year? then this low-XXs, one very margin guess I third was And that quarter were typically confidence me and PACCAR margins see was average. which It's And thing the is to you up the tags red as I why your question, forecast think at what's the delivery do above strong, bring incremental exit second my up. So giving quarter puts then struck you where sort low-end? the the the incremental better a than in

the sustainability on of then and of strength just the the seeing parts Your that the potentially you're new view product help that Thanks. in from launches. that given sort

build Europe, the deliveries deliveries on about we to with as X,XXX built happening. are as continue about third guided trucks we to X,XXX base then there's in less we XX XX, constraints say start -- think have are based we the fewer XX,XXX. one we Europe. We And in Well, quarter. If supply the built that limitations obviously have trucks there's under

days. of third hence the we of kind and our fourth quarter. tags shutdown, slightly So to plus similar the And And red no expect tags quarter. improving, build gradually level, see kind the quarter the guidance that as for summer we them, fourth some red second call you in a improve our more that'll are

your standpoint, margins it kind almost question, second answered a you of from So right.

great that strong XX.X% based that to guided We margins products gross we performing that's what's think going team We levels upon continue to as mentioned. to going have quarter That's are very the performance and a that to XX% improve to parts range. the new and high at in be we're going you keep seeing. excellent the performance fourth the

Okay.

So incrementals bad your volumes in think way to is assuming business there. about a are low-XXs

you how We think business running that about and terms we're is think the of it let what providing. about in I'll it way.

my I I just to know but right, is if try. want thinking

I it. you. Thank appreciate Okay.

Take right. care. All

the of from Jefferies. line Your comes Stephen Volkmann with question next

now is line open. Your

guys. you, picture Thank longer-term maybe but answered, Most of I have Great. guess a bigger my questions question. been

of levels back there years, great need to through pulled gross of your of think about to sort not, job three a back margin? parts thinking margins forward. points, levels. curious I'm business below gross still that years there? of the growing truck be that the XXXX, last what anything us Is how from would done those the key but that going would if including over margins XXX we've issues preclude or And And You've levers basis gross to are pre-COVID get two the kind be getting XXXX circa kind just the you're had I that

to? Well, Harrie you want

industry our margins the I in and continue it you see tailwinds. launch have -- and America provided products our margins good Steve that margin are well, be you and new well. new and the our to would our that know, key and key to those -- And the margins of North trucks our new Europe a as in stay and parts industry growth. best say the the in as we to the on role strong as element improve that's would there the best No, now, goal trucks plays

And operations that, Harrie I efficiently. that's of add, out add as and teams I our incredible everything and would we we sometimes I with that agree done said, less trucks an have would world as making to done many job sure get around can the

So if as that that be well. upside smooths then will out, an

of Okay. so was want we that, the that question. always spirit Harrie, Yes, more the and

We wish we had [ph].

then interested; your you're And results of starting kind yet. curious despite was be lower maybe revenue financial I mean if used that just more goodness of not -- I prices normalize quite I'm mostly truck one there. see good to of or may sales. Was can kind again I attach services kind the And of those here. were that maybe

It's nice see strong. finance perform quarter to ever. $XX continues Run the third million really a second really, how at company the to quarter, best in

there's low. are achieving to go continues sales our So levels, of truck at year. are and truck that The very a fourth We'd But flow, nice we the of growing next used used quality revenues quarter less company. and portion range reflect really that trucks. so less of really, is XX results. to the provides well are would a Past fact sell. enter excellent. into continue company low of dues delivering those Portfolio X.X% centers, it like the the Business for kind the proud well. team have do now trucks finance to tailwind used going expect as we the I finance that And used inventories

line comes Your Evercore. David next with from question Raso of the

Your open. line is now

you. thank Hi,

of the the XXXX, open a get to books, you let and America national for us out all can know is open trying far that sense books they're in for far fleets? Thank North are Is Europe. size customers? open how that Just you. open order how For in and

opens, the we well said, next in are at into delivery as year. second books quarter half plans their in second QX look for this capital even allocate full and order The as Yes. it's the and Dave, in filling through full-year their substantially customers

So yes, of as all expect would by going well strong and we it year. segments a kind really for

backlog than sequential what the trying a notably that's in of And to higher in quarter? was pricing third the Just the already pricing what's the sense book. from that shipping get is in

Well, we so implies into confidence XX.X% have and margins fourth we'll to XX% too. talked of the cost price we versus quarter. our that year the improvement that in model, kind about gross we that XX.X%, from think have next

another what's improvement you're year, assuming and different U.S., EU And new radically I truck rates geography, but the divulge at growth see margins not any even the the doing improvement structurally, cyclically even know it don't moment knowing and you we about next what about book, by the get about you think trucks trucks on margin just bit when Canada. How obviously I'm how should when but to next are think know doing? geographically? improvement a thinking geographies you geographies geographically are margin in your the with economics, versus of we about to think be sense is trying something a some just might new there the margin what year,

North terms of PACCAR world I our a for margin. terms That think The in is America. new percent doing is to us what customers. of well the we higher we product changed performance that in to in their operating so trucks know the of Europe cost that is helpful changed around are the than in You percent

us job. is really a in Mexico to that South team and that's doing helpful they're America I job a our In job. And great great Europe. a doing Australia, in And so they're think great in doing

happening for kind of it everywhere I at us. think So look that it's and

can and mind. One obviously if used last I for was a shipments gotten third Terrific. run on in but The I of great it truck opportunities the have you roughly quick to unit mean little equate kind first $XX gain used we overall the the don't trucks sale creates delivery you're the on better, rate? curious, more FinCo, the more regardless that sale, in Was used quarter, one the million obviously of wasn't quarters new, used two price. similar selling gain third when the the quarter

would Dave or -- more less I it No, was similar, say David.

appreciate Thank I Helpful. it. you.

Good Right. day.

comes Markets. question of the next with line Capital John Joyner from BMO Your

Your line is now open.

morning. question. I good one just Hey, had

on Raso's moderate level? used when prices back how the prices about the So regard put used up and maybe or through wholesale normal question, such tend what a side this to more do so guess to I I do Steve's you mean trucks following guess are on with and thinking happens I to I mean that? you other of

what there the to volumes constrained could and market is going be we ages is before are it we been and think if are I some markets freight be up like time Well, truck know that a that has that. experience that is up, We think then cyclical.

and great get We a return where of on They premium is good products in and the the a have the that job Kenworth to the a business. marketplace. market Peterbilt financial team maximizing really in do our adjusting DAF, really services

get part the that of tend of operate premium. we the in, to So cycle regardless we

Madrid. in that area. expand up capability We continue opened new We've in center a used truck our to

and to business in continue you'd Harrie? retail add, the of the a more there anything of We opportunities long-term. take Is as advantage selling helped that's

it I that summarizes well. No, think

Okay.

DeBlase Deutsche with from the Bank. of next Your line question Nicole comes

now line Your is open.

my Thanks Yes thanks for guys. taking questions.

Sure.

a just supply on starting maybe chain. bit little more with So

were this like you If is lot that time there's where and of last So going chain guys here, to how we signs still improvement? we quarter observed totally constraints understand any think have but last just at year? about relative of major supply a

compared definitely it's think year-over-year, I better. that to

kind see I in the think quarters we of that are issues that different sequentially adjusting.

we of really and good suppliers semiconductors We fourth out being other of kinds issues, labor that parts get need. job issues should but a the quarter. Hence, material the kinds us of grow that relationships good has in from kind other we have helping see maybe to really production the doing issues. them they're purely solve we and with work to little with a it shifted continue of being our to I'd bit the say

as is in Okay. and CapEx, drivers helpful. CapEx That's understand that the there? increased respect but really R&D what have new what where causing I the today. most you year-on-year guidance are relative I investment guess lies, XXXX XXXX with think the R&D big step-up? And guys per people to to your

that a we Well, neat projects lot of really have on. we're working

We clean great have some diesel projects.

have We great projects. some zero emissions

those continue our can to numbers. connected all our trucks we of more that platform, vehicle services of so and and build into investments what's around autonomous production and our the We world, enhancing capacity is driving kind engines platforms make

those to pretend moving it's future great just see So for because us. they fun a numbers

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

line is Your now open.

of so I there's lot on and or on a where, my will not the unease demand whether the question supply side, first supply two, Europe, and So much in one just is guess and chain. energy that but around on cause shortages disruptions

months you to see the so see going internal as and guess worry do? know is you You an that view, next about? point something of stable three if risky? something or being down Do your perhaps shut than from to six more issue don't I have supplier's months And I of a you that is

Well, we with. you they're from I read that headlines. tell our work dealing I understand business, the would closely same we can But really suppliers with so inside think can everybody our of that anything that

parts so next partners the been We'll into continue good. is look and everybody sure it. far, we We we to pretty attention to make get work need. to try year, paying as to it's And

ourselves I today. a sit in find think we as we good position pretty

apologize Thank Okay. Steve. been effort a there's one over lot lot you and a I revenues the of obviously, look other years, aftermarket and you. reference you when your to this margin contribution in Or at stop are and you point, revenue of answered But you both this if margin, as aftermarket the mix-up? are that is I'll from At increasing. across kind get and there. margin? of business Thank on still seeing disproportional runway there parts proprietary you. And

think Sure. disproportional. I don't it's

by e-commerce, lot parts of customers efficient. of the dealers and team serving is I of on lot a our doing will I that's them business and expect well a going that what's the revenue by and this are of job continue. of recurring a lot fantastic lot relationship growth systems, a and helping think a building, And become creating think I more

line the comes with from Jerry Sachs. question Your of Goldman next Revich

Your line is now open.

your in truck your medium are better as diesel? Preston, all in How making procurement the differences OEMs is versus process that you're that conversations at and the fleets. duty are in approach you having electrifying an market different EV plans wondering customers impact looking opportunity that to could in get interested environment number potentially talk you to any with on share their longer-term if for to of have other Or use? about terms their in might of the

Yes.

analytics cost with any and think that use and equation looking them. they're advantage, an the about and kind of and I buying a route same they of infrastructure as charging total to and think adds It for EVs kind decision operating ownership for return now to do work mileage they of they a cost elements because utilization. make

Peterbilt, So parts the all try they upon think active together five And all that's well, to to XX a it. move like of of their into make that time available that quickly. into the incentives is up as all we partner when case. or start and then think that used kind XX. come going the to are depends then time when And input that going about at costs it dialogue and to even to Kenworth, with DAF them to partner the And try use them to be that with or it very sure with more is kind market, are I

diesel number the versus of Or a in those participants suppliers any conversations were different is fewer they diesel they of And in conversation purchases? given concentrating environment complexity? are Okay. terms than with that

high overall. that No, our in have quality PACCAR high they and I performance and excellent think a trust

that have do well. through them and want the We on, that as that that to to deliver is kind we of make EVs we'll promise we

with that solution we provide I them. for a have think successful the at and to seat them a table work makes So that

this. to gears. And Super. shift Okay. missed just Harrie, I apologize if I

that a today. in from far coverage You in standpoint in have, the about about talk mid-XXs track out that the so market can -- prepared how you regulations are the once you for opportunity move remarks market implemented. and to as talk regulations share higher the about potentially backlog Europe implemented? times Europe timeframe share you are And continue talk the we're lead you alluded in Can to the to new

we certain dimension that that benefit full DAF allows is new The Yes. meet and more you and new aerodynamic of more mass talked if trucks to taking regulations fuel-efficient legislation. criteria. be designed about for

can market record the DAF Europe on strong you That a today. that in and share truck for in we trucks XX.X% was only as far as grow us Like So share. that's a really tell, manufacturer margins the market those has to said, DAF. year-to-date, puts position

trucks, an in to we're -- share that new yes, coming further in the market even position grow With we're excellent years. the

the orders Harrie, how of question, that lead taking time sorry, And you far out part in Europe? are

time. -- us, at or more at first the capacity We nicely second the are quarter the filling less that we're and suppliers moment in is full in quarter today current providing then this

as a balance. nice really backlog that's us for we So good It's XXXX. a enter

the line of next Michael Bank question America. Your from of Feniger with comes

is now line Your open.

Is think rates contract dynamic freight your and now? they seeing months? little earlier. next should taking that terms is investment investing questions. relevant how in a my rates, you're decisions right point and that data impact how that profile does seeing about think between for and you're the purchasing I thanks gap going just asked But decisions forward? spot spot investors their got that spread know profile contract about rates few the between Hey, the customers' over of How this

rates good business when of they're it's a that at I which that is such XX%, our plenty the it levels terms still XX% for in they're rates, good have. think think expect good that's And high business. are is of portion carried I as wanting when Well, for when I think think their of oversubscribed of will And good market, them the then which loads contract -- tonnage there's minority people there's strong be that like and is, market, a you business statement, still spot to the there would for their are for I businesses. general being

of back look I margins if QX QX. XX And like are up nine the out your over sense. Makes years, last gross

So why the XX.X% with from the year. gross should of that increase think about first maybe guide we in help level next XX% us Anything margin wouldn't to quarter understand in QX, there?

shouldn't. that we I don't said think they

that said had this we quarter. think we gross good I margins

year. fourth think be we good will quarter, We expect that a them quarter and and to XXXX be very really good next

annual finishing to could think, And in squeeze I basis, you're an year, just I I That's more if X%. X% just the helpful. R&D. on mean one on up this

Your truck sales are up nearly XX%.

next going how into few should are kind for the like going R&D did guide are bit Any cycle over that little years, a and about that guys forward? about making some there's R&D the about and It way we think thinking you of seems as should to like going year. as to You we guys think think how the sales about of be of given be a investments digits. to you catch-up at truck a -- next up backlog how metric? guys forward spending of is and percent your XXXX? a Is double But looking

of you that we financially-positioned a we think how share spend strong value going that's spending. the that We we our is with I bring projects have it. that about want bring on Sure. R&D think such to our that products customers, R&D we to value the good define to customers. our company we on money to can are spending and We're how

from Partners. of Kauffman Research with Your Vertical next Jeff the line question comes

open. is Your now line

Well you everybody. very congratulations much. Thank

Thank you.

follow-up. to but of things of been I changing I have globally, Hey, a my are lot has mean wanted of that has pretty currency and kind answered, those one things questions dramatically. been changed

about when a as of idea about just impact kind And XXXX. talking business, of And talking Parts bit to curious we're moving of Financial the think what an it whether give kind of we're the us about Services truck we about little revenues is toward business, was business, it's think You'd your talk impacting, currency the I profits or how back. kind never reported about looking at results. being the you could if know whether

Jeff, Brazilian reduced due million million. QX Michael. the for to And offset year, euro; this it was mostly the was $XXX real for stronger. the by effects, is some were currency Revenues $XXX with

was impact been that there's million profit -- for on and net million about about profit $XX year-to-date. was So and effect, for QX the $XX

then one just follow-up. And Okay.

these attached on the I about some see I because these it be that there? investment little maybe some to days information trucks time the platforms platforms. of you wondering were what's some Aurora of just building could in PACCAR just couple years. for And Can a autonomous discussed the bit new out to terms showing a talk of of there electrify some talked flows data be of of or of system vehicles your customers and looking on beneficiary horizon. new And progress your had every a where seems there, an about You to was you go in one

Just platforms. kind new these of an update some of on

going progress. our They're really with are. partnerships Aurora We're Sure. we're really excellent and Together, making it's progress with pleased we and making the well. others, with

It truck makes We software the And well. expertise through are which it developing our system as into the mentioned, this a a vehicle their redundancy, we're product you future. integrates combined of and is I vehicle as creating, for creates which feasible. expertise think, autonomous really operating making the platform, Jeff, neat

the from line Cowen of Company. Elkott comes question and Matt next with Your

Your now open. line is

on environment forward, it's cadence production anomalous cycle. given Maybe how the been has how of deliveries guys going pushed I'll truck this the you. ask and Thank you new off

deliveries quarters? to in increases As you're like more with supply we your the quarter-over-quarter to modest maybe further few in continue steady, manufacturing and even see a chain than ease next linear quarterly historically cadence could able optimize disruptions deliveries processes, or

supply you're that think make it does that. right to improves, smoother, as as base say it I Well, the

it see advantage got we take full to think get can totally before that. smooth we I of

just as how watch how the all that, building make quarter. the deliveries I that be; to increasing And fourth are. We prediction And that when keep that. beyond think would said, we opportunities the of I we'll can. don't that, we know trucks expect expect in we we will

like least think do is we supply year the that we feels strong, next still constrained. the think demand at As that be to beginning

one Got And last question. just then Yes. it.

hitting non-residential to projects backlog projects easy Residential that -- construction you for U.S.? moderating, some or coming of to expectation If look but late guys you infrastructure start will is if either it kind manufacturers your they're the expecting year, in is activity the historically, start ask back you can off-highway an trace of infrastructure-related equipment this we their residential year. business in obviously there's next to

that the the are and strength vocational do we support will that next in leaders and the of And Kenworth markets markets, year, those trucks for see U.S. in those Peterbilt expect projects kinds markets. continue and

So tailwind we would expect XXXX. a that to be for good news and

line comes from next Group Research. with of the question Your Scott Wolfe

Your now open. line is

order We saw thanks. Hey numbers really anything industry with color the for strong September. September? directionally Any October? similar on seeing you Are

that so continued see seeing and as September we're well. strong even we being We're was strong, October seeing Yes. strengthening

Okay.

headwind? fourth asked, it lot quarter a terms with question is than Jeff the be that bigger On that similar that? QX Or million could of $XX net currency in

Michael?

year It started to euro -- would last similar number. in that. a it fourth to but will of be be the already had expect similar so quarter last about drop to The I

the exchange on depends rate are going it -- be what to Of course,

Sure.

Two months still. Yes.

acquiring last that Nikola think battery with that? have on about Romeo, How do just then And you thing does any you? suppliers for impact

Yes.

give in contracts really us a good and base with producers structure place the in have supply long-term We supply. adequate world the have battery that

change So anything? Nikola a really doesn't supplier acquiring as competitor a

impact vehicles. our produce to EV No, all. It's ability at

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

call. the for We'd like operator. thank And you, thank everyone to joining

call. concludes This conference Thank for today's attending. you you. Thank

now disconnect. may You