NINE MONTHS: CNH INDUSTRIAL'S SALES UP 8%, PROFITS UP 6%
Nov. 20, 2017
Source: CNH Industrial news release
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Third quarter highlights:
*Industrial Activities' revenues up 16% (up 12% on a constant currency basis) led by solid improvements in all segments
*Operating profit of Industrial Activities increased 41% to $351 million, with an operating margin of 5.5%, with positive performance in Agricultural Equipment, Construction Equipment and Powertrain
*Adjusted net income increased to $148 million in the third quarter of 2017, with adjusted diluted EPS of $0.11
*Net industrial debt was $2.6 billion at September 30, 2017, up $0.5 billion compared to June 30, 2017, due to the typical seasonal increase in net working capital
*In the quarter, the Company repurchased a total of $1.7800 million in principal amount of 6.250% Notes due 2018 and 2.750% Notes due 2019 issued by CNH Industrial Finance Europe S.A., and issued $1.7650 million in principal amount of 1.750% Notes due 2025
*On October 24, Fitch Ratings initiated coverage of CNH Industrial N.V. and assigned its longterm issuer default rating of "BBB-" with stable outlook; CNH Industrial securities will be eligible for the main investment grade indices in the U.S. market
*Full year guidance for Industrial Activities revenues increased to $25.0 to $25.5 billion and Adjusted diluted EPS increased to $0.44 to $0.46; year-end net industrial debt increased to $1.5 to $1.7 billion as a result of the strengthening euro to the U.S. dollar
Agricultural Equipment's net sales increased 12.4% in the third quarter of 2017 compared to the third quarter of 2016 (up 9.4% on a constant currency basis). Net sales increased in EMEA, primarily due to improved volume for combines and low horsepower tractors and to favorable net price realization.
Net sales also increased in APAC, mainly in India, and in LATAM, mainly in Brazil and Argentina. Net sales in NAFTA were flat, as stable row crop market conditions and improved tractor mix were offset by reduced market demand for hay and forage products.
Operating profit was $208 million in the third quarter of 2017, a 34% increase over the $155 million in the third quarter of 2016. Operating margin increased 1.2 p.p. to 7.8% as a result of the favorable volume and product mix, the positive net price realization more than offsetting raw material cost increases, and improved quality costs, while the Company increased its investments in research and development.