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CNH Industrial (CNHI) Q4 Earnings In Line With Estimates
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CNH Industrial (CNHI - Free Report) posted fourth-quarter 2022 adjusted earnings per share of 36 cents, which increased from 25 cents in the prior-year quarter and were in line with the Zacks Consensus Estimate. Higher-than-anticipated revenues across the Agricultural, Construction and Financial Services segments, offset by adverse impact of foreign exchange rates, resulted in this in-line performance.
In the fourth quarter, consolidated revenues rose 26.7% from the year-ago level to $6,943 million, topping the consensus mark of $6,308 million. The company’s net sales from industrial activities came in at $6,352 million, up 27.2%, led by higher volumes and favorable pricing.
CNH Industrial N.V. Price, Consensus and EPS Surprise
In the December quarter, net sales in the Agricultural segment grew 29% year over year to $5,369 million due to favorable price realization and an improved mix, mainly driven by Europe, North America and South America regions. The metric also topped the Zacks Consensus Estimate of $4,810 million. The segment’s adjusted EBIT came in at $701 million, jumping 69% year over year and topping the consensus mark of $665 million. The adjusted EBIT margin increased to 13.1% from 10%.
The Construction segment’s sales grew 17% year over year to $983 million in the quarter, led by price realization and contribution from the Sampierana business. Also, revenues beat the Zacks Consensus Estimate of $914 million. Adjusted EBIT came in at $34 million, gaining 70% on the back of favorable volume and a positive price realization. The figure also surpassed the consensus mark of $28.32 million. The adjusted EBIT margin increased to 3.5% from 2.4%.
The Financial Services segment revenues went up 21% to $577 million, topping the consensus mark of $488 million on higher used equipment sales, improved volumes and better base rates across all regions, especially in South America. Net income from the segment declined 17% to $75 million in the quarter under review.
Financial Details
CNH Industrial had cash and cash equivalents of $4,376 million as of Dec 31, 2022, down from $5,044 million as of Dec 31, 2021. The company’s debt totaled $22,962 million at the end of the fourth quarter of 2022, up from $20,897 million as of Dec 31, 2021. The firm had available liquidity of $10,632 million as of Dec 31, 2022.
CNH Industrial’s net cash provided by operating activities was $1,443 million, down from $1,724 million in the year-ago period. Free cash flow from industrial activities was $2,049 million in the quarter versus FCF of $1,225 million in the fourth quarter of 2021.
The board proposed an annual cash dividend of 38 cents per share, subject to the approval of shareholders as well as formal board consent.
2023 Guidance
For 2023, sales are expected to increase year over year in the band of 6-10%. The projections for free cash flow from industrial activities are in the range of $1.3 billion to $1.5 billion. R&D expenses and capex projections stand at around $1.6 billion. SG&A expenses are expected to grow by no more than 5% by 2022.
Zacks Rank and Key Picks
CNH Industrial currently carries a Zacks Rank #3 (Hold).
A few better-ranked players in the same industry are Deere & Company (DE - Free Report) and AGCO (AGCO - Free Report) , both carrying a Zacks Rank #2 (Buy).
Deere is the world’s largest producer of agricultural equipment, manufacturing agricultural machinery since 1837 under the iconic John Deere brand. The Zacks Consensus Estimate for DE’s 2023 sales and earnings imply year-over-year growth of 10.84% and 13.07%, respectively.
AGCO is a leading manufacturer and distributor of agricultural equipment and related replacement parts. The Zacks Consensus Estimate for AGCO’s 2023 sales and earnings imply year-over-year growth of 1.67% and 4.49%, respectively.
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CNH Industrial (CNHI) Q4 Earnings In Line With Estimates
CNH Industrial (CNHI - Free Report) posted fourth-quarter 2022 adjusted earnings per share of 36 cents, which increased from 25 cents in the prior-year quarter and were in line with the Zacks Consensus Estimate. Higher-than-anticipated revenues across the Agricultural, Construction and Financial Services segments, offset by adverse impact of foreign exchange rates, resulted in this in-line performance.
In the fourth quarter, consolidated revenues rose 26.7% from the year-ago level to $6,943 million, topping the consensus mark of $6,308 million. The company’s net sales from industrial activities came in at $6,352 million, up 27.2%, led by higher volumes and favorable pricing.
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 December quarter, net sales in the Agricultural segment grew 29% year over year to $5,369 million due to favorable price realization and an improved mix, mainly driven by Europe, North America and South America regions. The metric also topped the Zacks Consensus Estimate of $4,810 million. The segment’s adjusted EBIT came in at $701 million, jumping 69% year over year and topping the consensus mark of $665 million. The adjusted EBIT margin increased to 13.1% from 10%.
The Construction segment’s sales grew 17% year over year to $983 million in the quarter, led by price realization and contribution from the Sampierana business. Also, revenues beat the Zacks Consensus Estimate of $914 million. Adjusted EBIT came in at $34 million, gaining 70% on the back of favorable volume and a positive price realization. The figure also surpassed the consensus mark of $28.32 million. The adjusted EBIT margin increased to 3.5% from 2.4%.
The Financial Services segment revenues went up 21% to $577 million, topping the consensus mark of $488 million on higher used equipment sales, improved volumes and better base rates across all regions, especially in South America. Net income from the segment declined 17% to $75 million in the quarter under review.
Financial Details
CNH Industrial had cash and cash equivalents of $4,376 million as of Dec 31, 2022, down from $5,044 million as of Dec 31, 2021. The company’s debt totaled $22,962 million at the end of the fourth quarter of 2022, up from $20,897 million as of Dec 31, 2021. The firm had available liquidity of $10,632 million as of Dec 31, 2022.
CNH Industrial’s net cash provided by operating activities was $1,443 million, down from $1,724 million in the year-ago period. Free cash flow from industrial activities was $2,049 million in the quarter versus FCF of $1,225 million in the fourth quarter of 2021.
The board proposed an annual cash dividend of 38 cents per share, subject to the approval of shareholders as well as formal board consent.
2023 Guidance
For 2023, sales are expected to increase year over year in the band of 6-10%. The projections for free cash flow from industrial activities are in the range of $1.3 billion to $1.5 billion. R&D expenses and capex projections stand at around $1.6 billion. SG&A expenses are expected to grow by no more than 5% by 2022.
Zacks Rank and Key Picks
CNH Industrial currently carries a Zacks Rank #3 (Hold).
A few better-ranked players in the same industry are Deere & Company (DE - Free Report) and AGCO (AGCO - Free Report) , both carrying a Zacks Rank #2 (Buy).
Deere is the world’s largest producer of agricultural equipment, manufacturing agricultural machinery since 1837 under the iconic John Deere brand. The Zacks Consensus Estimate for DE’s 2023 sales and earnings imply year-over-year growth of 10.84% and 13.07%, respectively.
AGCO is a leading manufacturer and distributor of agricultural equipment and related replacement parts. The Zacks Consensus Estimate for AGCO’s 2023 sales and earnings imply year-over-year growth of 1.67% and 4.49%, respectively.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.