CNH Industrial Reports 16% Decline in 2Q Revenue

• Second quarter consolidated revenue declined 16% on lower industry demand
• Second quarter diluted EPS at $0.34; adjusted diluted EPS at $0.38 ($0.52 in the second quarter of 2023)
• Results reflect continued execution of cost savings initiatives mitigating the impact of market headwinds
• Returned $1.2 billion to shareholders through dividends and share repurchases in the first half of 2024
• Full-year guidance updated to reflect weaker market conditions 

Basildon, UK — CNH Industrial N.V. (NYSE: CNH) today reported results for the three months ended June 30, 2024, with net income of $438 million and diluted earnings per share of $0.34 compared with net income of $710 million and diluted earnings per share of $0.52 for the three months ended June 30, 2023. Consolidated revenues were $5.49 billion (down approximately 16% compared to Q2 2023) and Net sales of Industrial Activities were $4.80 billion (down approximately 19% compared to Q2 2023). Net cash provided by operating activities was $379 million and Industrial Free Cash Flow generation was $140 million in Q2. 

Following the earnings call, JP Morgan analysts said, "Overall, we believe the bullish voices behind CNH are firming based on the cost reduction initiatives, a possible sale of the Construction business, and the hope for the Ag cycle downturn inflecting after 2025."

“I am thrilled to have rejoined the hardworking CNH team. I have long admired this leading company for its iconic brands and truly global presence. After spending my first weeks visiting our plants, dealers, and customers, I am impressed by the focus on advancing our brands’ distinctive positions, developing the product pipeline, accelerating our technology offerings, and turning around the construction business. I’m returning at a challenging point in our industries, and I appreciate the ongoing efforts that our employees have made this past quarter. We will continue to manage the business prudently through 2024 while positioning ourselves for 2025. I am confident in our success and look forward to presenting our strategy with you at an investor day in early 2025.” — Gerrit Marx, Chief Executive Officer

In North America, industry volume was down 11% year-over-year in the second quarter for tractors under 140 HP and was up 2% for tractors over 140 HP; combines were down 5%. In Europe, Middle East and Africa (EMEA), tractor and combine demand was down 10% and down 36%, respectively. South America tractor demand was down 10% and combine demand was down 26%, continuing the recent negative trend. Asia Pacific tractor demand was up 1% and combine demand was up 4%.

Agriculture net sales decreased for the quarter by 20% to $3.91 billion, primarily due to lower shipment volumes on decreased industry demand and dealer inventory requirements across all regions, partially offset by favorable price realization.

Gross profit margin was 24.4% (27.0% in Q2 2023), down 260 bps as a result of lower production volume and unfavorable mix. These were partially offset by price realization, primarily in North America, and improved purchasing and manufacturing costs.

Adjusted EBIT decreased to $536 million ($821 million in Q2 2023) driven by the lower industry volumes, partially offset by improved purchasing and manufacturing costs, and a continued reduction in SG&A expenses. R&D investments accounted for 5.5% of sales (4.9% in Q2 2023). Income from unconsolidated subsidiaries increased $15 million year-over-year. Adjusted EBIT margin was 13.7% (16.8% in Q2 2023).