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CNH Industrial (CNHI) to Report Q4 Earnings: Factors at Play
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CNH Industrial (CNHI - Free Report) is slated to release fourth-quarter 2022 results on Feb 2, before the opening bell. The Zacks Consensus Estimate for the quarter’s earnings and revenues is pegged at 36 cents per share and $6.31 billion, respectively.
CNH Industrial is an equipment and services company that manufactures agriculture and construction equipment for customers in 180 markets. The company came up with better-than-anticipated earnings in the last reported quarter. Higher-than-anticipated revenues across the Agricultural and Financial Services segments resulted in the outperformance.
Over the trailing four quarters, CNH Industrial outpaced estimates on all occasions, with the average being 18.8%. This is depicted in the graph below:
The Zacks Consensus Estimate for CNH Industrial’s fourth-quarter earnings per share has been revised upward by a penny in the past 30 days. While the bottom-line projection indicates an increase of 44% year over year, the Zacks Consensus Estimate for quarterly revenues suggests a year-over-year decline of 30.47%.
What to Expect
CNH Industrial’s fourth-quarter results will likely reflect the favorable impact of upgraded product offerings as well as advanced technologies. Raven Industries and Sampierana buyouts are expected to boost results of CNH Industrial's Agriculture and Construction segments, respectively. Encouragingly, CNHI upwardly revised its estimates for net sales from industrial activities, which sparks optimism for the to-be-reported quarter results. Industrial sales are now expected to increase year over year in the band of 16-18% instead of 12-14% guided earlier.
The Zacks Consensus Estimate for the Agriculture segment’s revenues is pegged at $4,809 million for the fourth quarter, suggesting a year-over-year increase of 15.8%. Sales are likely to have got a boost from an improved mix, increased demand and favorable price realization. The Zacks Consensus Estimate for the segment’s operating profit is pegged at $663 million, up from $414 million in the last year’s comparable quarter.
The Zacks Consensus Estimate for the Construction segment’s revenues is pegged at $914 million for the fourth quarter, suggesting a year-over-year increase of 8.3%. Sales are likely to have got a boost from enhanced price realization and contribution from the Sampierana business. The Zacks Consensus Estimate for the segment’s operating profit is pegged at $28 million, up from $20 million in the last year’s comparable quarter.
While higher year-over-year projected sales and profits from Agriculture and Construction units bode well, the expected weak performance of Financial Services may have played spoilsport. The Zacks Consensus Estimate for the Financial segment’s revenues is pegged at $488 million for the fourth quarter, suggesting a decline from $533 million recorded in the year-ago period.
Additionally, the company has been bearing the brunt of rising SG&A and R&D costs over the last few quarters and the trend is expected to have continued in the to-be-reported quarter, thereby clipping margins. Rising capital expenditure for the development of technically-enhanced products may also have dented the company’s cash flows in fourth-quarter 2022
What Does Our Model Say?
Our proven 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 -1.61%. This is because the Most Accurate Estimate is pegged a penny below the Zacks Consensus Estimate of earnings. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: It currently carries a Zacks Rank of 3.
While an earnings beat appears uncertain for CNHI, we present you one stock from the same industry, which, according to our model, has the right combination of elements to post an earnings beat for the quarter to be reported:
Deere & Company (DE - Free Report) : Deere is the world’s largest producer of agricultural equipment and manufacturing agricultural machinery. The company will release fourth-quarter 2022 results on Feb 17, before the opening bell. It has an Earnings ESP of +2.83% and a Zacks Rank #2.
The Zacks Consensus Estimate for Deere’s to-be-reported quarter’s earnings and revenues is pegged at $5.49 per share and $11.42 billion, respectively. DE surpassed earnings estimates in three of the trailing four quarters and missed once, with the average surprise being 7.1%.
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CNH Industrial (CNHI) to Report Q4 Earnings: Factors at Play
CNH Industrial (CNHI - Free Report) is slated to release fourth-quarter 2022 results on Feb 2, before the opening bell. The Zacks Consensus Estimate for the quarter’s earnings and revenues is pegged at 36 cents per share and $6.31 billion, respectively.
CNH Industrial is an equipment and services company that manufactures agriculture and construction equipment for customers in 180 markets. The company came up with better-than-anticipated earnings in the last reported quarter. Higher-than-anticipated revenues across the Agricultural and Financial Services segments resulted in the outperformance.
Over the trailing four quarters, CNH Industrial outpaced estimates on all occasions, with the average being 18.8%. This is depicted in the graph below:
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 fourth-quarter earnings per share has been revised upward by a penny in the past 30 days. While the bottom-line projection indicates an increase of 44% year over year, the Zacks Consensus Estimate for quarterly revenues suggests a year-over-year decline of 30.47%.
What to Expect
CNH Industrial’s fourth-quarter results will likely reflect the favorable impact of upgraded product offerings as well as advanced technologies. Raven Industries and Sampierana buyouts are expected to boost results of CNH Industrial's Agriculture and Construction segments, respectively. Encouragingly, CNHI upwardly revised its estimates for net sales from industrial activities, which sparks optimism for the to-be-reported quarter results. Industrial sales are now expected to increase year over year in the band of 16-18% instead of 12-14% guided earlier.
The Zacks Consensus Estimate for the Agriculture segment’s revenues is pegged at $4,809 million for the fourth quarter, suggesting a year-over-year increase of 15.8%. Sales are likely to have got a boost from an improved mix, increased demand and favorable price realization. The Zacks Consensus Estimate for the segment’s operating profit is pegged at $663 million, up from $414 million in the last year’s comparable quarter.
The Zacks Consensus Estimate for the Construction segment’s revenues is pegged at $914 million for the fourth quarter, suggesting a year-over-year increase of 8.3%. Sales are likely to have got a boost from enhanced price realization and contribution from the Sampierana business. The Zacks Consensus Estimate for the segment’s operating profit is pegged at $28 million, up from $20 million in the last year’s comparable quarter.
While higher year-over-year projected sales and profits from Agriculture and Construction units bode well, the expected weak performance of Financial Services may have played spoilsport. The Zacks Consensus Estimate for the Financial segment’s revenues is pegged at $488 million for the fourth quarter, suggesting a decline from $533 million recorded in the year-ago period.
Additionally, the company has been bearing the brunt of rising SG&A and R&D costs over the last few quarters and the trend is expected to have continued in the to-be-reported quarter, thereby clipping margins. Rising capital expenditure for the development of technically-enhanced products may also have dented the company’s cash flows in fourth-quarter 2022
What Does Our Model Say?
Our proven 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 -1.61%. This is because the Most Accurate Estimate is pegged a penny below the Zacks Consensus Estimate of earnings. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: It currently carries a Zacks Rank of 3.
You can see the complete list of today’s Zacks #1 Rank stocks here.
Stock With Favorable Combination
While an earnings beat appears uncertain for CNHI, we present you one stock from the same industry, which, according to our model, has the right combination of elements to post an earnings beat for the quarter to be reported:
Deere & Company (DE - Free Report) : Deere is the world’s largest producer of agricultural equipment and manufacturing agricultural machinery. The company will release fourth-quarter 2022 results on Feb 17, before the opening bell. It has an Earnings ESP of +2.83% and a Zacks Rank #2.
The Zacks Consensus Estimate for Deere’s to-be-reported quarter’s earnings and revenues is pegged at $5.49 per share and $11.42 billion, respectively. DE surpassed earnings estimates in three of the trailing four quarters and missed once, with the average surprise being 7.1%.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.