Trucking company PACCAR (NASDAQ: PCAR) fell short of the market’s revenue expectations in Q1 CY2026, with sales falling 8.9% year on year to $6.78 billion. Its GAAP profit of $1.15 per share was in line with analysts’ consensus estimates.
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PACCAR (PCAR) Q1 CY2026 Highlights:
- Revenue: $6.78 billion vs analyst estimates of $6.82 billion (8.9% year-on-year decline, 0.7% miss)
- EPS (GAAP): $1.15 vs analyst estimates of $1.16 (in line)
- Operating Margin: 16.3%, up from 10.3% in the same quarter last year
- Free Cash Flow Margin: 12.2%, up from 10% in the same quarter last year
- Market Capitalization: $66.94 billion
Company Overview
Founded more than a century ago, PACCAR (NASDAQ: PCAR) designs and manufactures commercial trucks of various weights and sizes for the commercial trucking industry.
Revenue Growth
A company’s long-term sales performance can indicate its overall quality. Any business can experience short-term success, but top-performing ones enjoy sustained growth for years. Regrettably, PACCAR’s sales grew at a mediocre 7.4% compounded annual growth rate over the last five years. This was below our standard for the industrials sector and is a tough starting point for our analysis.
We at StockStory place the most emphasis on long-term growth, but within industrials, a half-decade historical view may miss cycles, industry trends, or a company capitalizing on catalysts such as a new contract win or a successful product line. PACCAR’s performance shows it grew in the past but relinquished its gains over the last two years, as its revenue fell by 11.4% annually. 
This quarter, PACCAR missed Wall Street’s estimates and reported a rather uninspiring 8.9% year-on-year revenue decline, generating $6.78 billion of revenue.
Looking ahead, sell-side analysts expect revenue to grow 12.1% over the next 12 months, an improvement versus the last two years. This projection is particularly noteworthy for a company of its scale and implies its newer products and services will fuel better top-line performance.
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Operating Margin
Operating margin is a key measure of profitability. Think of it as net income - the bottom line - excluding the impact of taxes and interest on debt, which are less connected to business fundamentals.
PACCAR has been an efficient company over the last five years. It was one of the more profitable businesses in the industrials sector, boasting an average operating margin of 11.9%. This result was particularly impressive because of its low gross margin, which is mostly a factor of what it sells and takes huge shifts to move meaningfully. Companies have more control over their operating margins, and it’s a show of well-managed operations if they’re high when gross margins are low.
Looking at the trend in its profitability, PACCAR’s operating margin rose by 2 percentage points over the last five years, as its sales growth gave it operating leverage.
This quarter, PACCAR generated an operating margin profit margin of 16.3%, up 6 percentage points year on year. The increase was solid, and because its operating margin rose more than its gross margin, we can infer it was more efficient with expenses such as marketing, R&D, and administrative overhead.
Earnings Per Share
We track the long-term change in earnings per share (EPS) for the same reason as long-term revenue growth. Compared to revenue, however, EPS highlights whether a company’s growth is profitable.
PACCAR’s EPS grew at 11.7% compounded annual growth rate over the last five years, higher than its 7.4% annualized revenue growth. This tells us the company became more profitable on a per-share basis as it expanded.
We can take a deeper look into PACCAR’s earnings quality to better understand the drivers of its performance. As we mentioned earlier, PACCAR’s operating margin expanded by 2 percentage points over the last five years. This was the most relevant factor (aside from the revenue impact) behind its higher earnings; interest expenses and taxes can also affect EPS but don’t tell us as much about a company’s fundamentals.
Like with revenue, we analyze EPS over a more recent period because it can provide insight into an emerging theme or development for the business.
For PACCAR, its two-year annual EPS declines of 30.1% mark a reversal from its (seemingly) healthy five-year trend. We hope PACCAR can return to earnings growth in the future.
In Q1, PACCAR reported EPS of $1.15, up from $0.96 in the same quarter last year. This print was close to analysts’ estimates. Over the next 12 months, Wall Street expects PACCAR’s full-year EPS of $4.70 to grow 26.9%.
Key Takeaways from PACCAR’s Q1 Results
PACCAR's revenue slightly missed and its EPS was only in line with Wall Street’s estimates. Overall, we think this was a muted quarter. Investors were likely hoping for more, and shares traded down 2.1% to $124.54 immediately after reporting.
Should you buy the stock or not? We think that the latest quarter is only one piece of the longer-term business quality puzzle. Quality, when combined with valuation, can help determine if the stock is a buy. We cover that in our actionable full research report which you can read here (it’s free).
