We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Why Is CNH (CNH) Up 0.3% Since Last Earnings Report?
Read MoreHide Full Article
A month has gone by since the last earnings report for CNH Industrial (CNH - Free Report) . Shares have added about 0.3% in that time frame, underperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is CNH due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
CNH Industrial Q2 Earnings Match Estimates, Decline Y/Y
CNH Industrial 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.
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.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended downward during the past month.
The consensus estimate has shifted -20.37% due to these changes.
VGM Scores
Currently, CNH has a subpar Growth Score of D, though it is lagging a bit on the Momentum Score front with an F. However, the stock was allocated a grade of A on the value side, putting it in the top quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. It's no surprise CNH has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Why Is CNH (CNH) Up 0.3% Since Last Earnings Report?
A month has gone by since the last earnings report for CNH Industrial (CNH - Free Report) . Shares have added about 0.3% in that time frame, underperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is CNH due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
CNH Industrial Q2 Earnings Match Estimates, Decline Y/Y
CNH Industrial 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.
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.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended downward during the past month.
The consensus estimate has shifted -20.37% due to these changes.
VGM Scores
Currently, CNH has a subpar Growth Score of D, though it is lagging a bit on the Momentum Score front with an F. However, the stock was allocated a grade of A on the value side, putting it in the top quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. It's no surprise CNH has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.