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CNH Industrial (CNH) Q2 Earnings Match Estimates, Decline Y/Y
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CNH Industrial (CNH - Free Report) reported second-quarter 2024 adjusted earnings per share (EPS) of 38 cents, down from 52 cents in the prior-year quarter. The figure was in line with the Zacks Consensus Estimate.
In the second quarter, consolidated revenues declined nearly 16% from the year-ago level to $5.49 billion and missed the consensus mark of $5.64 billion. The company’s net sales from industrial activities came in at $4.8 billion, down 19% due to lower industry demand and dealer inventory management.
CNH Industrial N.V. Price, Consensus and EPS Surprise
In the second quarter, net sales in the Agriculture segment fell 20% year over year to $3.91 billion due to lower shipment volume and dealer inventory management. The metric also missed our estimate of $4.13 billion. The segment’s adjusted EBIT came in at $536 million, down 34.7% year over year due to lower volumes. The figure also missed our estimate of $578 million. The adjusted EBIT margin decreased to 13.7% from 16.8%.
The Construction segment’s sales declined 16% year over year to $890 million as a result of lower volume across all regions. The metric also missed our estimate of $924.5 million. Adjusted EBIT came in at $60 million, down 16.6% year over year due to lower volume. The figure, however, outpaced our estimate of $40.3 million. The adjusted EBIT margin decreased to 6.7% from 6.8%.
The Financial Services segment’s revenues went up 14% to $687 million, surpassing our estimate of $650 million on improved volumes across all regions except EMEA and higher yields. Net income from the segment fell to $91 million from $94 million reported in the year-ago quarter.
Financial Details
CNH Industrial had cash and cash equivalents of $2 billion as of Jun 30, 2024, down from $4.32 billion as of Dec 31, 2023.
The company’s debt totaled $26.81 billion as of Jun 30, 2024, down from $27.33 billion as of Dec 31, 2023.
The company’s net cash provided by operating activities was $379 million compared with net cash used by operating activities of $139 million reported in the year-ago period.
Free cash flow from industrial activities was $140 million in the quarter compared with free cash flow of $386 million in the second quarter of 2023.
Updated Guidance for 2024
For full-year 2024, Agriculture sales are now expected to decrease 15-20% compared with the earlier projected decline of 11-15%. Adjusted EBIT margin for the Agriculture segment is now expected in the band of 13-14% compared with the previous estimate of 13.5-14.5%. For the Construction segment, sales are expected to decline 15-20% year over year compared with a previous projection of a decline of 7-11%. Adjusted EBIT margin for the Construction segment is projected in the range of 5-6%.
The company’s free cash flow from industrial activities is anticipated in the range of $0.7-$0.9 billion, down from the previous guidance of $1.1-$1.3 billion. Adjusted EPS is now expected between $1.30 and $1.40, down from the previous estimate of $1.45-$1.55.
Zacks Rank & Key Picks
CNH currently carries a Zacks Rank #5 (Strong Sell).
The consensus estimate for MWA’s 2024 earnings suggests year-over-year growth of 36.51%. EPS estimates for 2024 and 2025 have improved 6 cents each in the past 30 days.
The Zacks Consensus Estimate for PKG’s 2024 sales suggests year-over-year growth of 4.81%. EPS estimates for 2024 and 2025 have improved 29 cents and 98 cents, respectively, in the past 30 days.
The Zacks Consensus Estimate for POWL’s 2024 sales and earnings suggests year-over-year growth of 45% and 191.50%, respectively. EPS estimates for 2024 and 2025 have improved $2.97 and $3.16, respectively, in the past seven days.
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CNH Industrial (CNH) Q2 Earnings Match Estimates, Decline Y/Y
CNH Industrial (CNH - Free Report) reported second-quarter 2024 adjusted earnings per share (EPS) of 38 cents, down from 52 cents in the prior-year quarter. The figure was in line with the Zacks Consensus Estimate.
In the second quarter, consolidated revenues declined nearly 16% from the year-ago level to $5.49 billion and missed the consensus mark of $5.64 billion. The company’s net sales from industrial activities came in at $4.8 billion, down 19% due to lower industry demand and dealer inventory management.
CNH Industrial N.V. Price, Consensus and EPS Surprise
CNH Industrial N.V. price-consensus-eps-surprise-chart | CNH Industrial N.V. Quote
Segmental Performance
In the second quarter, net sales in the Agriculture segment fell 20% year over year to $3.91 billion due to lower shipment volume and dealer inventory management. The metric also missed our estimate of $4.13 billion. The segment’s adjusted EBIT came in at $536 million, down 34.7% year over year due to lower volumes. The figure also missed our estimate of $578 million. The adjusted EBIT margin decreased to 13.7% from 16.8%.
The Construction segment’s sales declined 16% year over year to $890 million as a result of lower volume across all regions. The metric also missed our estimate of $924.5 million. Adjusted EBIT came in at $60 million, down 16.6% year over year due to lower volume. The figure, however, outpaced our estimate of $40.3 million. The adjusted EBIT margin decreased to 6.7% from 6.8%.
The Financial Services segment’s revenues went up 14% to $687 million, surpassing our estimate of $650 million on improved volumes across all regions except EMEA and higher yields. Net income from the segment fell to $91 million from $94 million reported in the year-ago quarter.
Financial Details
CNH Industrial had cash and cash equivalents of $2 billion as of Jun 30, 2024, down from $4.32 billion as of Dec 31, 2023.
The company’s debt totaled $26.81 billion as of Jun 30, 2024, down from $27.33 billion as of Dec 31, 2023.
The company’s net cash provided by operating activities was $379 million compared with net cash used by operating activities of $139 million reported in the year-ago period.
Free cash flow from industrial activities was $140 million in the quarter compared with free cash flow of $386 million in the second quarter of 2023.
Updated Guidance for 2024
For full-year 2024, Agriculture sales are now expected to decrease 15-20% compared with the earlier projected decline of 11-15%. Adjusted EBIT margin for the Agriculture segment is now expected in the band of 13-14% compared with the previous estimate of 13.5-14.5%. For the Construction segment, sales are expected to decline 15-20% year over year compared with a previous projection of a decline of 7-11%. Adjusted EBIT margin for the Construction segment is projected in the range of 5-6%.
The company’s free cash flow from industrial activities is anticipated in the range of $0.7-$0.9 billion, down from the previous guidance of $1.1-$1.3 billion. Adjusted EPS is now expected between $1.30 and $1.40, down from the previous estimate of $1.45-$1.55.
Zacks Rank & Key Picks
CNH currently carries a Zacks Rank #5 (Strong Sell).
Some better-ranked stocks in the Industrial Products sector are Mueller Water Products, Inc. (MWA - Free Report) , Packaging Corporation of America (PKG - Free Report) and Powell Industries, Inc. (POWL - Free Report) , each sporting a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
The consensus estimate for MWA’s 2024 earnings suggests year-over-year growth of 36.51%. EPS estimates for 2024 and 2025 have improved 6 cents each in the past 30 days.
The Zacks Consensus Estimate for PKG’s 2024 sales suggests year-over-year growth of 4.81%. EPS estimates for 2024 and 2025 have improved 29 cents and 98 cents, respectively, in the past 30 days.
The Zacks Consensus Estimate for POWL’s 2024 sales and earnings suggests year-over-year growth of 45% and 191.50%, respectively. EPS estimates for 2024 and 2025 have improved $2.97 and $3.16, respectively, in the past seven days.