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CNH Industrial delivered fourth-quarter 2023 adjusted earnings per share (EPS) of 42 cents, up from 36 cents reported in the prior-year quarter. The figure also beat the Zacks Consensus Estimate of 41 cents.
In the fourth quarter, consolidated revenues declined 2% from the year-ago level to $6.79 billion. The company’s net sales from industrial activities came in at $6.02 billion, down 5% due to lower industry demand in Agriculture. The figure lagged the Zacks Consensus Estimate of $6.35 billion.
Segmental Performance
In the fourth quarter, net sales in the Agriculture segment fell 8% year over year to $4.95 billion, due to lower industry volume and unfavorable mix. The metric missed our estimate of $5.29 billion. The segment’s adjusted EBIT came in at $669 million, down 4.6% year over year. The figure also lagged our estimate of $725.5 million. The adjusted EBIT margin increased to 13.5% from 13.1%, led by a better mix, higher gross margin and a slight reduction in SG&A expenses.
The Construction segment’s sales grew 9% year over year to $1.07 billion in the quarter, led by a favorable price realization and improved volume and mix in North America. However, the metric lagged our estimate of $1.1 billion. Adjusted EBIT came in at $62 million, up 82.5% on favorable price realization. The figure missed our estimate of $65.7 million. The adjusted EBIT margin increased to 5.8% from 3.5%.
The Financial Services segment’s revenues went up 33% to $768 million, surpassing our estimate of $681.9 million on improved volumes and better base rates across all regions. Net income from the segment rose to $113 million from $75 million reported in the year-ago quarter.
Financial Details
CNH Industrial had cash and cash equivalents of $4.32 billion as of Dec 31, 2023, down from $4.38 billion as of Dec 31, 2022.
The company’s debt totaled $27.3 billion as of Dec 31, 2023, up from $22.96 billion as of Dec 31, 2022.
The company’s net cash provided by operating activities was $1.52 billion, up from $1.44 billion in the year-ago period.
Free cash flow from industrial activities was $1.63 billion in the quarter compared with free cash flow of $2.05 billion in the fourth quarter of 2022.
CNHI approved an additional $500 million share buyback program, which will begin after the completion of the existing $1 billion share buyback program.
Guidance 2024
For full-year 2024, Agriculture sales are expected to decline 8-12% year over year. Adjusted EBIT margin for the Agriculture segment is expected in the band of 14-15%. For the Construction segment, sales are expected to decline 7-11% year over year. Adjusted EBIT margin for the Construction segment is expected in the range of 5-6%. The projections for free cash flow from industrial activities are in the range of $1.2-$1.4 billion. Adjusted diluted EPS is expected between $1.50 and $1.60.
The Zacks Consensus Estimate for MOD’s 2024 sales and earnings implies year-over-year growth of 4% and 67.2%, respectively. The EPS estimates for 2024 and 2025 have improved 22 cents each in the past 30 days.
The Zacks Consensus Estimate for NIO’s 2023 sales implies year-over-year growth of 10.4%. The EPS estimates for 2024 have improved 7 cents in the past 30 days.
The Zacks Consensus Estimate for OSK’s 2024 sales and earnings indicates year-over-year growth of 6.7% and 4%, respectively. The EPS estimates for 2024 and 2025 have improved 16 cents and 29 cents, respectively, in the past 30 days.
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CNH Industrial (CNHI) Q4 Earnings Beat Estimates, Rise Y/Y
CNH Industrial delivered fourth-quarter 2023 adjusted earnings per share (EPS) of 42 cents, up from 36 cents reported in the prior-year quarter. The figure also beat the Zacks Consensus Estimate of 41 cents.
In the fourth quarter, consolidated revenues declined 2% from the year-ago level to $6.79 billion. The company’s net sales from industrial activities came in at $6.02 billion, down 5% due to lower industry demand in Agriculture. The figure lagged the Zacks Consensus Estimate of $6.35 billion.
Segmental Performance
In the fourth quarter, net sales in the Agriculture segment fell 8% year over year to $4.95 billion, due to lower industry volume and unfavorable mix. The metric missed our estimate of $5.29 billion. The segment’s adjusted EBIT came in at $669 million, down 4.6% year over year. The figure also lagged our estimate of $725.5 million. The adjusted EBIT margin increased to 13.5% from 13.1%, led by a better mix, higher gross margin and a slight reduction in SG&A expenses.
The Construction segment’s sales grew 9% year over year to $1.07 billion in the quarter, led by a favorable price realization and improved volume and mix in North America. However, the metric lagged our estimate of $1.1 billion. Adjusted EBIT came in at $62 million, up 82.5% on favorable price realization. The figure missed our estimate of $65.7 million. The adjusted EBIT margin increased to 5.8% from 3.5%.
The Financial Services segment’s revenues went up 33% to $768 million, surpassing our estimate of $681.9 million on improved volumes and better base rates across all regions. Net income from the segment rose to $113 million from $75 million reported in the year-ago quarter.
Financial Details
CNH Industrial had cash and cash equivalents of $4.32 billion as of Dec 31, 2023, down from $4.38 billion as of Dec 31, 2022.
The company’s debt totaled $27.3 billion as of Dec 31, 2023, up from $22.96 billion as of Dec 31, 2022.
The company’s net cash provided by operating activities was $1.52 billion, up from $1.44 billion in the year-ago period.
Free cash flow from industrial activities was $1.63 billion in the quarter compared with free cash flow of $2.05 billion in the fourth quarter of 2022.
CNHI approved an additional $500 million share buyback program, which will begin after the completion of the existing $1 billion share buyback program.
Guidance 2024
For full-year 2024, Agriculture sales are expected to decline 8-12% year over year. Adjusted EBIT margin for the Agriculture segment is expected in the band of 14-15%. For the Construction segment, sales are expected to decline 7-11% year over year. Adjusted EBIT margin for the Construction segment is expected in the range of 5-6%. The projections for free cash flow from industrial activities are in the range of $1.2-$1.4 billion. Adjusted diluted EPS is expected between $1.50 and $1.60.
Zacks Rank & Key Picks
CNHI currently carries a Zacks Rank #3 (Hold).
Some better-ranked players in the auto space are Modine Manufacturing Company (MOD - Free Report) , NIO Inc. (NIO - Free Report) and Oshkosh Corporation (OSK - Free Report) . MOD sports a Zacks Rank #1 (Strong Buy), while NIO & OSK carry a Zacks Rank #2 (Buy) each at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for MOD’s 2024 sales and earnings implies year-over-year growth of 4% and 67.2%, respectively. The EPS estimates for 2024 and 2025 have improved 22 cents each in the past 30 days.
The Zacks Consensus Estimate for NIO’s 2023 sales implies year-over-year growth of 10.4%. The EPS estimates for 2024 have improved 7 cents in the past 30 days.
The Zacks Consensus Estimate for OSK’s 2024 sales and earnings indicates year-over-year growth of 6.7% and 4%, respectively. The EPS estimates for 2024 and 2025 have improved 16 cents and 29 cents, respectively, in the past 30 days.