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What's in the Offing for CNH Industrial's (CNHI) Q2 Earnings?

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CNH Industrial (CNHI - Free Report) is slated to release second-quarter 2021 results on Jul 30, before the opening bell. The Zacks Consensus Estimate for the quarter’s earnings is pegged at 27 cents per share on revenues of $7.66 billion.

This Italian-American vehicle maker delivered better-than-anticipated earnings in the last reported quarter. The bottom line also surpassed the year-ago profit level. This outperformance was driven by the higher-than-anticipated revenues and profits from industrial activities.

Over the trailing four quarters, CNH Industrial outpaced estimates on all occasions, the average surprise being 176.2%. This is depicted in the graph below:

CNH Industrial N.V. Price and EPS Surprise

CNH Industrial N.V. Price and EPS Surprise

CNH Industrial N.V. price-eps-surprise | CNH Industrial N.V. Quote

Trend in Estimate Revisions

The Zacks Consensus Estimate for CNH Industrial’s second-quarter earnings per share has moved up four cents in the past 90 days. Moreover, this compares favorably with the year-ago quarter’s loss of 7 cents per share, calling for year-over-year growth of a whopping 485.7%. The Zacks Consensus Estimate for quarterly revenues also suggests a year-over-year jump of 37.3%.

Earnings Whispers

Our proven Zacks model does not conclusively predict an earnings beat for CNH Industrial this time around. The combination of a positive Earnings ESP, and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold), increases the odds of an earnings beat. However, that is not the case here as elaborated below.
 
Earnings ESP: CNH Industrial has an Earnings ESP of 0.00%. This is because the Most Accurate Estimate is on par with the Zacks Consensus Estimate. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: CNH Industrial currently carries a Zacks Rank of 3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Key Factors

CNH Industrial’s quarterly results will likely highligh the favorable impact of surging revenues from industrial activities (comprising Agricultural Equipment, Construction Equipment, Commercial and Specialty vehicles as well as Powertrain segments) and financial services segments.

Markedly, the Zacks Consensus Estimate for quarterly revenues from the total Industrial segment is pegged at $7,081 million, suggesting a significant increase from the $5,150 million recorded in second-quarter 2020. Further, the consensus mark for the segment’s operating profit is pinned at $488 million, calling for a reversal of the loss of $94 million seen in the last-year quarter.

Additionally, the Zacks Consensus Estimate for quarterly revenues from the Financial Services segment is pinned at $459 million, indicating a rise from the $441 million reported in the year-ago period.

Besides, CNH Industrial teamed up with Raven Industries during the quarter in discussion. The combination of Raven’s technologies with CNH Industrial’s strong product portfolio provides customers greater access to productivity-enhancing automation technologies and groundbreaking agricultural innovations, which is likely to have boosted the company’s earnings during the second quarter.

However, the global chip crunch, which is currently wreaking havoc on the auto industry, and escalating raw material prices and freight costs are expected to have dented CNH Industrial’s margins during the April-June period. Furthermore, rising capital expenditure for the development of technically-enhanced products might have dented the company’s cash flows and overall margins during the June-end quarter.

Stocks to Consider

Here are a few stocks in the auto sector which are worth considering, as these have the right combination of elements to come up with an earnings beat this time around:

General Motors (F - Free Report) has an Earnings ESP of +19.83% and flaunts a Zacks Rank #1, at present. It is scheduled to report earnings results on Aug 4.

Tenneco (TEN - Free Report) has an Earnings ESP of +1.2% and currently carries a Zacks Rank #3. The company is slated to release quarterly numbers on Aug 5.

Lear Corporation (LEA - Free Report) has an Earnings ESP of +3.05% and carries a Zacks Rank of 3, currently. The company is set to announce quarterly figures on Aug 6.


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Ford Motor Company (F) - free report >>

Tenneco Inc. (TEN) - free report >>

Lear Corporation (LEA) - free report >>

CNH Industrial N.V. (CNHI) - free report >>