CNH Industrial delivered third-quarter 2023 adjusted earnings per share of 42 cents, which increased from 41 cents in the prior-year quarter and matched the Zacks Consensus Estimate.
In the third quarter, consolidated revenues rose 2% from the year-ago level to $5,986 million. The company’s net sales from industrial activities came in at $5,332 million, down 1% due to lower industry demand in Agriculture. The metric also lagged the Zacks Consensus Estimate of $5,767 million.
Segmental Performance
In the third quarter, net sales in the Agriculture segment fell 2.6% year over year to $4,384 million due to lower industry volume. The metric also missed our estimate of $4,751 million. The segment’s adjusted EBIT came in at $672 million, rising 0.1% year over year but missing our estimate of $732 million. The adjusted EBIT margin increased to 15.3% from 14.8%, led by a better mix, a higher gross margin and a slight reduction in SG&A expenses.
The Construction segment’s sales grew 6% year over year to $948 million in the quarter, led by favorable price realization and improved volume and mix in North America. However, the metric lagged our estimate of $968.1 million. Adjusted EBIT came in at $60 million, gaining 150% on favorable mix and a positive price realization. The figure missed our estimate of $66 million. The adjusted EBIT margin increased to 6.3% from 2.7%.
The Financial Services segment’s revenues went up 35% to $653 million, topping our estimate of $567.9 million on improved volumes and better base rates across all regions. Net income from the segment remained flat at $86 million.
Financial Details
CNH Industrial had cash and cash equivalents of $2,979 million as of Sep 30, 2023, down from $4,376 million as of Dec 31, 2022.
The company’s debt totaled $24,958 million as of Sep 30, 2023, up from $22,962 million as of Dec 31, 2022.
The company’s net cash used by operating activities was $608 million, down from $886 million in the year-ago period.
Free cash flow absorbed from industrial activities was $127 million in the quarter versus free cash flow of $202 million in the third quarter of 2022.
Updated Guidance 2023
For Industrial activities, sales are expected to increase in the band of 3-6% year over year, down from a prior estimate of 8-11%. The projections for free cash flow from industrial activities are in the range of $1-$1.2 billion, down from prior guidance of $1.3-$1.5 billion. R&D expenses and capex projections are pegged at $1.6 billion. SG&A expenses are expected to grow by no more than 5% vs 2022.
Zacks Rank & Key Picks
CNHI currently carries a Zacks Rank #3 (Hold).
Some top-ranked players in the auto space are Toyota Motor (TM - Free Report) and Modine Manufacturing Company (MOD - Free Report) , each sporting Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for TM’s 2023 sales and earnings implies year-over-year growth of 10.6% and 29.7%, respectively.
The Zacks Consensus Estimate for MOD’s 2023 sales and earnings indicates year-over-year growth of 6.5% and 55.9%, respectively. The EPS estimates for 2023 and 2024 have increased by 16 cents and 9 cents, respectively, in the past seven days.
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CNH Industrial delivered third-quarter 2023 adjusted earnings per share of 42 cents, which increased from 41 cents in the prior-year quarter and matched the Zacks Consensus Estimate.
In the third quarter, consolidated revenues rose 2% from the year-ago level to $5,986 million. The company’s net sales from industrial activities came in at $5,332 million, down 1% due to lower industry demand in Agriculture. The metric also lagged the Zacks Consensus Estimate of $5,767 million.
Segmental Performance
In the third quarter, net sales in the Agriculture segment fell 2.6% year over year to $4,384 million due to lower industry volume. The metric also missed our estimate of $4,751 million. The segment’s adjusted EBIT came in at $672 million, rising 0.1% year over year but missing our estimate of $732 million. The adjusted EBIT margin increased to 15.3% from 14.8%, led by a better mix, a higher gross margin and a slight reduction in SG&A expenses.
The Construction segment’s sales grew 6% year over year to $948 million in the quarter, led by favorable price realization and improved volume and mix in North America. However, the metric lagged our estimate of $968.1 million. Adjusted EBIT came in at $60 million, gaining 150% on favorable mix and a positive price realization. The figure missed our estimate of $66 million. The adjusted EBIT margin increased to 6.3% from 2.7%.
The Financial Services segment’s revenues went up 35% to $653 million, topping our estimate of $567.9 million on improved volumes and better base rates across all regions. Net income from the segment remained flat at $86 million.
Financial Details
CNH Industrial had cash and cash equivalents of $2,979 million as of Sep 30, 2023, down from $4,376 million as of Dec 31, 2022.
The company’s debt totaled $24,958 million as of Sep 30, 2023, up from $22,962 million as of Dec 31, 2022.
The company’s net cash used by operating activities was $608 million, down from $886 million in the year-ago period.
Free cash flow absorbed from industrial activities was $127 million in the quarter versus free cash flow of $202 million in the third quarter of 2022.
Updated Guidance 2023
For Industrial activities, sales are expected to increase in the band of 3-6% year over year, down from a prior estimate of 8-11%. The projections for free cash flow from industrial activities are in the range of $1-$1.2 billion, down from prior guidance of $1.3-$1.5 billion. R&D expenses and capex projections are pegged at $1.6 billion. SG&A expenses are expected to grow by no more than 5% vs 2022.
Zacks Rank & Key Picks
CNHI currently carries a Zacks Rank #3 (Hold).
Some top-ranked players in the auto space are Toyota Motor (TM - Free Report) and Modine Manufacturing Company (MOD - Free Report) , each sporting Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for TM’s 2023 sales and earnings implies year-over-year growth of 10.6% and 29.7%, respectively.
The Zacks Consensus Estimate for MOD’s 2023 sales and earnings indicates year-over-year growth of 6.5% and 55.9%, respectively. The EPS estimates for 2023 and 2024 have increased by 16 cents and 9 cents, respectively, in the past seven days.
Research Chief Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
This company targets millennial and Gen Z audiences, generating nearly $1 billion in revenue last quarter alone. A recent pullback makes now an ideal time to jump aboard. Of course, all our elite picks aren’t winners but this one could far surpass earlier Zacks’ Stocks Set to Double like Nano-X Imaging which shot up +129.6% in little more than 9 months.
Free: See Our Top Stock And 4 Runners Up
Get the latest research report on TM - FREE
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