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CNH Industrial N.V. (CNHI - Free Report) reported adjusted earnings per share of 28 cents in second-quarter 2018, increasing from 19 cents in the prior-year quarter. Moreover, the bottom line surpassed the Zacks Consensus Estimate of 20 cents.
Reportedly, net income jumped to $408 million from $236 million recorded in second-quarter 2017.
Consolidated revenues rose almost 15% year over year to $8 billion, beating the Zacks Consensus Estimate of $7.46 billion. Strong performance across all segments aided CNH Industrial’s second quarter. The company’s net sales in Industrial Activities went up 16% to $7.6 billion while adjusted EBITDA (Earnings before interest, tax, depreciation and amortization) of Industrial Activities increased 30% to $843 million.
CNH Industrial N.V. Price, Consensus and EPS Surprise
Revenues from the Agricultural Equipment segment rose 20% year over year to $3.3 billion. The rise was due to favorable end-user demand environment, positive price realization and increased demand from NAFTA row crop industry. Moreover, the segment’s adjusted EBIT was $396 million, a $135 million increase compared with the second quarter of 2017. The rise was due to favorable volume and a better mix, primarily in NAFTA and EMEA (constituting countries in European Union).
Construction Equipment segment’s revenues increased 23% to $799 million compared with the prior-year quarter. The gain is primarily due to increased worldwide demand. However, Adjusted EBIT was $33 million, a $26 million gain compared with the prior-year quarter. Positive net price realization and higher volume sales led to the gain, which was partly offset by the increase in raw material costs.
Revenues from the Commercial Vehicles gained 11% to $2.9 billion compared with the prior-year quarter. The rise was driven by favorable product mix and positive pricing, primarily in EMEA and LATAM (constituting the Central and South America, and the Caribbean Islands). The segment’s adjusted EBIT was $92 million, witnessing an increase of $20 million from second-quarter 2017.
Powertrain segment’s revenues rose 7.2% year over year to $1.2 billion. High sales to external customers accounted for 49% of total net sales. The segment’s adjusted EBIT was $108 million, an $11 million increase compared with the second quarter of 2017.
Revenues from the Financial Services declined 0.8% year over year to $498 million. This decline was majorly due to a lower average portfolio balance in NAFTA. Adjusted EBIT was $141 million.
Financial Details
CNH Industrial had cash and cash equivalents of $4.5 billion as of Jun 30, 2018, compared with $5.4 billion as of Dec 31, 2017. The company’s debt was $24.4 billion as of Jun 30, 2018, recording a decline from $25.9 billion as of Dec 31, 2017.
In second-quarter 2018, CNH Industrial’s net cash inflow from operations was $727 million compared with an inflow of $644 million a year ago.
2018 Outlook
For 2018, the company reaffirmed its net sales anticipation of Industrial Activities to be approximately $28 billion. However, adjusted earnings per share are expected to be 67-71 cents compared with the prior estimation of 65-67 cents per share. Net industrial debt is anticipated between $0.7-0.9 billion from the prior expectation of $0.8-1 billion.
Zacks Rank & Key Picks
CNH Industrial currently carries a Zacks Rank #4 (Sell). A few better-ranked stocks in the auto space are Fox Factory Holding Corporation (FOXF - Free Report) , Oshkosh Corporation (OSK - Free Report) and LKQ Corporation (LKQ - Free Report) . Fox Factory and Oshkosh presently carry a Zacks Rank of 2 (Buy), while LKQ sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Fox Factory has an expected long-term growth rate of 15.8%. Over a year, shares of the company have gained 30.2%.
Oshkosh has an expected long-term growth rate of 18.3%. Over a year, shares of the company have gained 7.3%.
LKQ has an expected long-term growth rate of 15%. Shares of the company have risen 2.8% in the past year.
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CNH Industrial (CNHI) Q2 Earnings & Revenues Beat Estimates
CNH Industrial N.V. (CNHI - Free Report) reported adjusted earnings per share of 28 cents in second-quarter 2018, increasing from 19 cents in the prior-year quarter. Moreover, the bottom line surpassed the Zacks Consensus Estimate of 20 cents.
Reportedly, net income jumped to $408 million from $236 million recorded in second-quarter 2017.
Consolidated revenues rose almost 15% year over year to $8 billion, beating the Zacks Consensus Estimate of $7.46 billion. Strong performance across all segments aided CNH Industrial’s second quarter. The company’s net sales in Industrial Activities went up 16% to $7.6 billion while adjusted EBITDA (Earnings before interest, tax, depreciation and amortization) of Industrial Activities increased 30% to $843 million.
CNH Industrial N.V. Price, Consensus and EPS Surprise
CNH Industrial N.V. Price, Consensus and EPS Surprise | CNH Industrial N.V. Quote
Segmental Performances
Revenues from the Agricultural Equipment segment rose 20% year over year to $3.3 billion. The rise was due to favorable end-user demand environment, positive price realization and increased demand from NAFTA row crop industry. Moreover, the segment’s adjusted EBIT was $396 million, a $135 million increase compared with the second quarter of 2017. The rise was due to favorable volume and a better mix, primarily in NAFTA and EMEA (constituting countries in European Union).
Construction Equipment segment’s revenues increased 23% to $799 million compared with the prior-year quarter. The gain is primarily due to increased worldwide demand. However, Adjusted EBIT was $33 million, a $26 million gain compared with the prior-year quarter. Positive net price realization and higher volume sales led to the gain, which was partly offset by the increase in raw material costs.
Revenues from the Commercial Vehicles gained 11% to $2.9 billion compared with the prior-year quarter. The rise was driven by favorable product mix and positive pricing, primarily in EMEA and LATAM (constituting the Central and South America, and the Caribbean Islands). The segment’s adjusted EBIT was $92 million, witnessing an increase of $20 million from second-quarter 2017.
Powertrain segment’s revenues rose 7.2% year over year to $1.2 billion. High sales to external customers accounted for 49% of total net sales. The segment’s adjusted EBIT was $108 million, an $11 million increase compared with the second quarter of 2017.
Revenues from the Financial Services declined 0.8% year over year to $498 million. This decline was majorly due to a lower average portfolio balance in NAFTA. Adjusted EBIT was $141 million.
Financial Details
CNH Industrial had cash and cash equivalents of $4.5 billion as of Jun 30, 2018, compared with $5.4 billion as of Dec 31, 2017. The company’s debt was $24.4 billion as of Jun 30, 2018, recording a decline from $25.9 billion as of Dec 31, 2017.
In second-quarter 2018, CNH Industrial’s net cash inflow from operations was $727 million compared with an inflow of $644 million a year ago.
2018 Outlook
For 2018, the company reaffirmed its net sales anticipation of Industrial Activities to be approximately $28 billion. However, adjusted earnings per share are expected to be 67-71 cents compared with the prior estimation of 65-67 cents per share. Net industrial debt is anticipated between $0.7-0.9 billion from the prior expectation of $0.8-1 billion.
Zacks Rank & Key Picks
CNH Industrial currently carries a Zacks Rank #4 (Sell). A few better-ranked stocks in the auto space are Fox Factory Holding Corporation (FOXF - Free Report) , Oshkosh Corporation (OSK - Free Report) and LKQ Corporation (LKQ - Free Report) . Fox Factory and Oshkosh presently carry a Zacks Rank of 2 (Buy), while LKQ sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Fox Factory has an expected long-term growth rate of 15.8%. Over a year, shares of the company have gained 30.2%.
Oshkosh has an expected long-term growth rate of 18.3%. Over a year, shares of the company have gained 7.3%.
LKQ has an expected long-term growth rate of 15%. Shares of the company have risen 2.8% in the past year.
5 Medical Stocks to Buy Now
Zacks names 5 companies poised to ride a medical breakthrough that is targeting cures for leukemia, AIDS, muscular dystrophy, hemophilia, and other conditions.
New products in this field are already generating substantial revenue and even more wondrous treatments are in the pipeline. Early investors could realize exceptional profits.
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