CNH Industrial CNH reported third-quarter 2024 adjusted earnings per share (EPS) of 24 cents, down from 42 cents in the prior-year quarter. The figure also missed the Zacks Consensus Estimate of 28 cents.

In the third quarter, consolidated revenues declined nearly 22% from the year-ago level to $4.65 billion and missed the consensus mark of $4.77 billion. The company’s net sales from industrial activities came in at $3.99 billion, down 25% due to lower industry demand and dealer inventory management.

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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 third quarter, net sales in the Agriculture segment fell 24% year over year to $3.31 billion due to lower shipment volume. The metric also missed our estimate of $3.46 billion. The segment’s adjusted EBIT came in at $336 million, down 48% year over year due to lower volumes. The figure also missed our estimate of $458.6 million. The adjusted EBIT margin decreased to 10.2% from 14.6%.

The Construction segment’s sales declined 28% year over year to $687 million as a result of lower volume across all regions. The metric also missed our estimate of $748.5 million. Adjusted EBIT came in at $40 million, down 33% year over year due to lower volume and unfavorable net price realization. The figure, however, outpaced our estimate of $27.8 million. The adjusted EBIT margin decreased to 5.8% from 6.3%.

The Financial Services segment’s revenues went up 1% to $659 million, surpassing our estimate of $606.5 million on improved volumes across all regions except EMEA and higher yields in North America. Net income from the segment fell to $78 million from $86 million reported in the year-ago quarter.

Financial Details

CNH Industrial had cash and cash equivalents of $1.8 billion as of Sept. 30, 2024, significantly down from $4.32 billion as of Dec. 31, 2023.

The company’s debt totaled $27.3 billion as of Sept. 30, 2024, down from $27.33 billion as of Dec. 31, 2023.

The company’s net cash provided by operating activities was $791 million compared with $232 million reported in the year-ago period.

CNH reported negative free cash flow from industrial activities of $180 million in the quarter compared with negative free cash flow of $127 million in the third quarter of 2023.

CNH Updates Guidance for 2024

For 2024, Agriculture sales are now expected to decrease 22-23% compared with the earlier projected decline of 15-20%. Adjusted EBIT margin for the Agriculture segment is now expected in the band of 10.5-11.5% compared with the previous estimate of 13-14%. For the Construction segment, sales are expected to decline 21-22% year over year compared with a previous projection of a decline of 15-20%. Adjusted EBIT margin for the Construction segment is projected in the range of 5-6%.

The company expects free cash outflow from industrial activities in the range of $100-$300 million against the previous guidance of inflow of $700-$900 million. Adjusted EPS is now expected between $1.05 and $1.15, down from the previous estimate of $1.30-$1.40.

Zacks Rank & Key Picks

CNH currently carries a Zacks Rank #5 (Strong Sell).

Some better-ranked stocks in the Industrial Products sector are Packaging Corporation of America PKG, Apogee Enterprises, Inc. APOG and Century Aluminum Company CENX, 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 Zacks Consensus Estimate for PKG’s 2024 sales and earnings suggests year-over-year growth of 7.18% and 4.25%, respectively. EPS estimates for 2024 and 2025 have improved 34 cents and 51 cents, respectively, in the past 30 days.

The Zacks Consensus Estimate for APOG’s fiscal 2024 sales suggests year-over-year growth of 6.08%. EPS estimates for fiscal 2025 and 2026 have improved 20 cents each in the past 60 days.

The Zacks Consensus Estimate for CENX’s 2024 earnings suggests year-over-year growth of 746.81%. EPS estimates for 2024 and 2025 have improved 49 cents and $2.35, respectively, in the past 30 days.

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