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CNH Industrial (CNHI) Q3 Earnings In-Line With Estimates
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CNH Industrial (CNHI - Free Report) 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.
CNH Industrial N.V. Price, Consensus and EPS Surprise
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.
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 (CNHI) Q3 Earnings In-Line With Estimates
CNH Industrial (CNHI - Free Report) 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.
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 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.