PACCAR Inc

The filings show a business in a down cycle. Full-year 2025 revenue was $28.44 billion, down from $33.66 billion, and net income was $2.38 billion, down from $4.16 billion. Equity grew to $19.26 billion, and total assets were $44.34 billion at year-end 2025. The Beneish M-Score is -2.788, which falls below -1.78 and is therefore not in the elevated manipulation-risk zone; this is a screening result, not proof of accuracy. The Piotroski F-Score is 4 of 6 computable signals. The Fog Index of the MD&A is 12.74, which is in the readable band below 14. Operating cash flow was 1.86 times net income for 2025 ($4.42 billion versus $2.38 billion), a ratio that is higher partly because earnings fell. No Altman Z-Score is on file, so it is not assessed here. Management's narrative points to tariffs and softer retail demand. The numbers support that in the Truck segment, where U.S. and Canada revenue fell 16% and Mexico, South America, Australia and other revenue fell 37%. Europe is the exception: the over 16-tonne market grew to 79,800 units from 72,000, but DAF's share of that market fell to 13.1% from 14.0%. Brasil's over 16-tonne market also contracted, to 16,900 units from 21,500. Financial Services new loan and lease volume fell 10% to $1.35 billion. Readers may want to look at the 10-K's Item 1A supplier and tariff disclosures, and the MD&A's segment tables, to judge how durable the margin pressure is.

Catalyst.Management attributes the decline to lower retail demand for trucks. In the first quarter of 2026 (10-Q filed 2026-04-29), net sales and revenues were $6,776.5 million versus $7,441.7 million a year earlier. Truck segment revenue fell 13% to $4,526.5 million as new truck deliveries dropped to 33,100 units from 40,100, a 17% decline. The MD&A cites lower unit volume, higher tariff costs, and higher material and labor costs, which reduced Truck income before income taxes to $176.2 million from $364.9 million. Parts revenue was roughly flat at $1,710.1 million, and Financial Services revenue rose 3% to $542.2 million.

Hidden risk.The Q1 2025 comparison is distorted. Other included a $350.0 million charge for European civil litigation (EC-related claims), so reported net income rose to $605.3 million from $505.1 million even though Truck pre-tax income fell by roughly half. Backlog is also shrinking: the 90-day firm backlog was $2.6 billion at December 31, 2025, down from $3.8 billion a year earlier and $7.6 billion at December 31, 2023. The risk factors further flag dependence on Cummins, Eaton, ZF and Magna for key components, and on semiconductors.