Key Takeaways
- Steady Financial Performance: CNH Industrial N.V. reported a marginal increase in net income to $570 million in Q3 2023, with a slight uptick in diluted earnings per share to $0.42, compared to Q3 2022.
- Revenue Resilience: Despite challenging market conditions, CNH Industrial maintained a stable revenue stream, with consolidated revenues rising to $5.99 billion, a 2% increase from the previous year.
- Operational Efficiency: A notable improvement in gross profit margins for Industrial Activities was achieved, rising to 23.9% from 23.0% in the previous year’s quarter, reflecting strong price realization and operational performance.
- Restructuring Initiatives: The company has announced an immediate restructuring plan to reduce salaried workforce costs by 5%, with further rightsizing efforts expected to reduce total SG&A expenses by 10-15%.
- Future Outlook Adjustments: In light of market softening, particularly in South America, CNH Industrial has adjusted its 2023 outlook, with net sales expected to increase by 3% to 6%, and targeted adjusted diluted EPS at about $1.70.
- S&P Global Rating Upgrade: The S&P Global Ratings agency has raised its rating on CNH Industrial from BBB to BBB+.
CNH Industrial N.V. Q3 2023 Results
CNH Industrial N.V., a global leader in capital goods, has reported its financial results for the third quarter of 2023, showcasing resilience and adaptability in a fluctuating global economy. With a slight increase in net income and earnings per share compared to last year, the company has demonstrated its ability to sustain growth even as specific market segments experience softening demand.
Despite a modest 1% decrease in net sales for Industrial Activities, the company’s consolidated revenues climbed to nearly $6 billion. The favorable pricing across its segments and a 6% increase in construction net sales contributed to the overall positive revenue outcome. Gross profit margins improved, and both the Agriculture and Construction segments saw margin expansion. Operating cash flows remained strong, although free cash flow absorption and increased consolidated debt highlight the need for careful financial management in the future.
Restructuring Program Undertaken
In response to the evolving industry landscape, the company is undertaking a comprehensive restructuring program. This decisive action is expected to significantly reduce labor and non-labor expenses, strengthening the company’s financial footing and competitive edge.
Worldwide Performance
CNH has strong sales in North America, while Europe and South America have experienced declines. Agriculture sales have slightly decreased due to volume challenges, but the gross profit margin increased due to price realization and reduced production costs. Construction net sales increased by 6%, and gross profit margin improved due to favorable product mix and price realizations. CNH has revised its 2023 outlook to anticipate more conservative net sales growth and a steady increase in SG&A expenses, while still holding steady to its adjusted diluted EPS target.
S&P Global Ratings Upgrade
On November 30, 2023, S&P Global Ratings made the following credit rating changes for the company and its subsidiaries:
- Long-term issuer credit ratings for CNH Industrial N.V. and CNH Industrial Capital LLC were raised from ‘BBB’ to ‘BBB+’.
- Short-term issuer credit rating for CNH Industrial N.V. and CNH Industrial Capital LLC was affirmed at ‘A-2’.
- Issue-level ratings on CNH Industrial N.V. and its industrial subsidiaries’ debt were raised from ‘BBB’ to ‘BBB+’.
- Issue-level ratings on CNH Industrial Capital LLC’s senior unsecured debt were raised from ‘BBB’ to ‘BBB+’.
These rating changes indicate an improvement in the creditworthiness of CNH Industrial N.V. and its subsidiaries, and are expected to have a positive impact on their ability to access capital markets and secure funding at lower costs.
CNH Industrial Latest News
CNH Industrial Shifts to NYSE, Initiates $1 Billion Buyback (2023/11/07)
CNH Industrial has decided to delist its shares from Euronext Milan and focus on the New York Stock Exchange due to a shift in trading volume since the company’s restructuring in early 2022. Along with the delisting announcement, CNH Industrial has launched a share buyback program from November 2023 to March 2024. The transition to the NYSE is aimed at enhancing market liquidity and investor engagement. The company expresses gratitude to Euronext Milan and looks forward to its future on the NYSE. Additional details will be available on the CNH Industrial website.
CNH Industrial Wins Multiple Agritechnica Innovation Awards for Advancements in Sustainable Farming (2023/10/31)
CNH Industrial won five medals at this year’s Agritechnica Innovation Awards, conferred annually by the DLG German Agricultural Society. New Holland Agriculture, a brand under CNH Industrial, took home the event’s only gold medal for its new Twin Rotor Combine Harvester Concept. Another silver medal was awarded for the T4 Electric Power tractor, the industry’s first all-electric tractor with autonomous features. Case IH, another brand under CNH Industrial, was spotlighted for its innovative Axial-Flow feed rate radar system. STEYR, CNH Industrial’s specialized tractor brand for European farming, received a silver medal for its unique Hybrid CVT tractor prototype. These awards underscore the company’s dedication to sustainability as a central pillar of its purpose.
A Sustainable Push: CNH’s Commitment in Review (2023/10/27)
CNH Industrial has released the latest edition of its “A Sustainable Year” digital magazine, showcasing the company’s commitment to sustainability and innovation. The magazine emphasizes the company’s three pillars of reducing carbon footprint, championing circularity and eco-efficiency, and promoting inclusion, equity, and engagement. CNH’s dedication to innovation is evident in its dynamic simulator for agriculture, electrified machinery, and thought leadership pieces in the magazine. The company’s efforts have earned them recognition in the top 1% of the S&P Global ESG Score 2022 and the CDP annual A-List. With a history of over two centuries and globally recognized brands such as Case IH and New Holland, CNH Industrial is dedicated to providing top-tier solutions that drive efficiency and success while empowering customers to create a better world.
CNH Industrial Invests in Advanced Farm Technologies to Accelerate Smart Harvesting (2023/10/04)
CNH Industrial has invested in Advanced Farm Technologies, a California-based start-up that specializes in the robotic harvesting of fruits. The investment aims to accelerate the development and commercialization of smart harvesting technologies to address labor costs and efficiency. The collaboration between CNH and Advanced Farm Technologies aims to improve productivity by up to five times. Advanced Farm Technologies combines machine learning and computer vision to pick the best fruits during the day or at night. The company’s tech stack includes robotic arms with gentle grippers, a serial-hybrid drive system, autonomous navigation, and automated bin handling. The investment is part of CNH Industrial’s broader strategy to bring cutting-edge solutions to its portfolio. The collaboration between CNH Industrial and Advanced Farm Technologies is expected to revolutionize how fruits are harvested and contribute to the broader goals of sustainable and efficient agriculture.
CNH Industrial Leads the Way in Agricultural Innovations (2023/09/28)
CNH Industrial is revolutionizing the farming landscape with groundbreaking agricultural innovations. Their recent achievements at the Agritechnica Innovation Awards, where they won five medals, including a gold medal for the Twin Rotor Combine Harvester Concept, demonstrate their pioneering spirit. With brands like New Holland Agriculture, Case IH, and STEYR, CNH Industrial offers cutting-edge solutions that enhance agricultural applications while driving customer success. They are committed to sustainability and an inclusive workplace, with over 40,000 employees united under the common goal of empowering customers to cultivate a brighter future.
New Partnership With ONE SMART SPRAY (2023/05/23)
CNH Industrial integrates ONE SMART SPRAY’s advanced spraying system to enhance its precision and automated spraying capabilities. The system uses multiple cameras for weed detection and selective spraying while providing farmers with real-time tracking of inputs and cost savings, in-depth weed maps, and automated reports accessible through mobile devices. With this integration, farmers can customize spraying operations, even in low-light conditions, and expand their operating windows to optimize productivity and maximize resources. This reinforces CNH Industrial’s position as a leader in agricultural technology, supporting farmers worldwide in achieving greater efficiency and sustainability.
CNH Industrial Reports Its Q1 2023 (2023/05/08)
CNH Industrial has released its Q1 2023 financial results, showing impressive growth compared to the same period in 2022. Consolidated revenues reached $5,342 million, marking a 15% increase. The company reported a net income of $486 million and an adjusted net income of $475 million. Diluted earnings per share (EPS) and adjusted diluted EPS were reported at $0.35, demonstrating significant improvement. Despite a net cash usage of $701 million in operating activities and an industrial free cash flow absorption of $673 million, CNH Industrial saw a boost in net sales for Industrial Activities, reaching $4,776 million. This success is attributed to solid demand in North American row crops, continued pricing strength, and a robust order backlog. As a result, the company has updated its net sales guidance for FY 2023, projecting an 8-11% increase compared to 2022.
Ends Third Tranche of $300M Buyback Program (2023/04/27)
CNH Industrial N.V. has completed transactions as part of the Third Tranche of its $300 million common share buyback program. The company’s broker conducted the purchases between April 17 and April 21, 2023, following pre-established instructions and independent of CNH Industrial. These transactions carried out before the closed period and in compliance with regulations, amounted to an investment of approximately €45,354,455.83 ($49,125,093.69) and included the acquisition of 3,393,237 common shares. Completing the Third Tranche highlights CNH Industrial’s commitment to shareholder value and its broader corporate strategy of optimizing capital allocation and delivering returns to shareholders. In addition, the bought-back shares will reduce the share capital. They can be utilized for share-based incentive plans or other purposes determined by the Board of Directors.
CNH Industrial To Invest $23M In Its Coëx Plant (2023/04/07)
In its French production and R&D plant in Coëx (Vendée), CNH Industrial has announced that it would invest 21.4 million euros over the next two years. The investment will be concentrated on developing new products and increasing the site’s production capabilities. For over 70 years, the New Holland company in Coëx has led the way in mechanical grape harvesting technology. It creates and produces self-propelled grape and olive harvesters for export worldwide. The Coëx-produced equipment is certified as Origine France Garantie (French Origin Guaranteed). Coëx position as a worldwide Center of Excellence for specialty harvesting and exporting the finest of “Made in France” to the globe is anticipated to be further enhanced by the investment.
Image provided by CNH Industrial
