CNH Industrial's Q4 Revenue Dips, Announces $500M Additional Share Buyback Program

CNH Industrial NV CNHI reported a fourth-quarter fiscal 2023 revenue decline of 2% year-over-year to $6.79 billion, -4% on a constant currency basis, beating the consensus of $6.66 billion.

Net sales of Industrial Activities were $6.02 billion, down 5%Y/Y, due to lower volume and mix in Agriculture.

Construction net sales grew by ~9% Y/Y to $1.07 billion, driven by net price realization and higher volume in North America.

Adjusted EPS of $0.42, up from $0.36, in line with the consensus.

Gross profit margin for Industrial Activities was 21.8%, up 20 bps YoY, with improvement from the corresponding period in the previous year in both Agriculture and Construction.

Agriculture segment adjusted EBIT margin expanded 40 bps Y/Y to 13.5%, and the Construction segment adjusted EBIT margin up 230 bps Y/Y to 5.8%.

Net cash provided by operating activities was $1.515 billion, and Industrial Free Cash Flow was $1.630 billion in the quarter. CNH Industrial had cash and cash equivalents of $4.32 billion at the end of the quarter.

Buyback: CNH announced an additional $500 million share buyback program to commence after completing the existing $1 billion share buyback program.

2024 Outlook: CNH Industrial expects Free Cash Flow of Industrial Activities of $1.2 billion-$1.4 billion and Adjusted EPS of $1.50-$1.60 versus $1.50 consensus.

CNHI forecasts that 2024 global industry retail sales will be lower in the agriculture and construction equipment markets than 2023.

It estimates that agriculture industry retail sales will be down 10-15% and construction equipment industry retail sales will be down around 10% compared to 2023.

The company expects the agriculture segment net sales to be down between 8%-12% YoY, including currency translation effects, with the adjusted EBIT margin between 14% and 15%.

The company sees Construction segment net sales down 7%-11% YoY, including currency translation effects, and adjusted EBIT margin of 5%-6%.

Price Action: CNHI shares are trading higher by 5.25% at $12.44 on the last check Wednesday.