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CNH Industrial (CNHI) Q4 Earnings Beat Estimates, Gain Y/Y

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CNH Industrial N.V. (CNHI - Free Report) reported adjusted earnings per share of 21 cents in fourth-quarter 2018, increasing from 13 cents in the prior-year quarter. Moreover, the bottom line surpassed the Zacks Consensus Estimate of 15 cents.

Reportedly, adjusted net income rose to $294 million from $190 million recorded in fourth-quarter 2017.

Consolidated revenues declined 0.3% from the year-ago quarter to $8.2 billion. However, the figure surpassed the Zacks Consensus Estimate of $8.08 billion. The company’s net sales for Industrial Activities were $7.7 billion while adjusted EBITDA (earnings before interest, tax, depreciation and amortization) was $690 million.

CNH Industrial N.V. Price, Consensus and EPS Surprise

 

2018 Results

In 2018, the company’s adjusted net income was $1.12 billion and adjusted earnings per share were 80 cents.

Consolidated revenues for the year went up 7.2% year over year to $29.71 billion.

Segmental Performances

Net revenues from the Agricultural Equipment segment rose 0.8% year over year to $3.2 billion. The rise was owing to favorable volume and positive net price realization in North America. Moreover, the segment’s adjusted EBIT was $258 million, marking a $16 million increase from the fourth quarter of 2017.

Construction Equipment segment’s revenues increased 7.1% from the prior-year quarter to $814 million. The gain was primarily due to favorable demand across all regions. Adjusted EBIT was $32 million, marking a $26-million increase from the prior-year quarter.

Revenues from Commercial Vehicles slumped 3.5% from the prior-year quarter to $3.2 billion. Lower volume, primarily for heavy vehicle trucks in EMEA, led to this decline. The segment’s adjusted EBIT was $90 million, witnessing an increase of $27 million from third-quarter 2017.

The Powertrain segment’s revenues gained 2.7% year over year to $1.2 billion. The segment’s adjusted EBIT was $121 million, marking a $20-million increase from the second quarter of 2017.

Revenues from the Financial Services segment declined 3% year over year to $520 million. Adjusted EBIT was $109 million, marking a decline of $7 million from the prior-year quarter.

Financial Details

CNH Industrial had cash and cash equivalents of $5 billion as of Dec 31, 2018, compared with $5.4 billion as of Dec 31, 2017. The company’s debt was $24.4 billion as of Dec 31, 2018, recording a decline from $25.9 billion as of Dec 31, 2017.

At the end of 2018, CNH Industrial’s net cash inflow from operations was $2.6 billion compared with $2.9 billion recorded a year ago.

Outlook

For 2019, the company projects net sales of approximately $28 billion for Industrial Activities. Adjusted earnings per share are expected to be 84-88 cents. Also, net industrial debt is anticipated between $0.4 billion and $0.2 billion.

Zacks Rank & Stocks to Consider

CNH Industrial currently carries a Zacks Rank #3 (Hold). A few better-ranked stocks in the broader auto sector are General Motors Company (GM - Free Report) , Cummins Inc. (CMI - Free Report) and Oshkosh Corporation (OSK - Free Report) , each currently carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

General Motors has an expected long-term growth rate of 8.5%. Share price of the company has increased 7% in the past six months.

Cummins has an expected long-term growth rate of 12%. Over the past six months, shares of the company have gained 6.1%.

Oshkosh has an expected long-term growth rate of 11.3%. Shares of the company have gained 8.1% in the past six months.

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