CNH Industrial Q4: Mixed Earnings, Weak 2025 Outlook, Prolonged Market Headwinds And More

CNH Industrial NV CNH shares are trading higher after the company reported mixed fourth-quarter results.

CNH’s quarter revenue declined by 28.2% year-over-year to $4.876 billion, beating the consensus of $4.513 billion. Adjusted EPS was $0.15, down from $0.39 a year ago and below the consensus of $0.18.

Net sales of Industrial Activities declined 31% year over year to $4.129 billion, primarily driven by reduced shipment volumes resulting from lower industry demand and dealer inventory reductions.

The gross profit margin of Industrial Activities fell by 230 basis points to 19.5%. Adjusted EBIT margin of Industrial Activities contracted 630 bps YoY to 4.7%, with Adjusted EBIT of Industrial Activities down 71% to $194 million.

Operating activities generated $1.692 billion in cash flow during the quarter, up from $1.515 billion a year ago. Free cash flow for Industrial Activities totaled $848 million.

Agriculture Segment net sales fell 31% year over year to $3.4 billion due to lower shipment volumes, weaker industry demand, and dealer destocking.

Also Read: CNH Industrial Analyst Sees 2025 As Pivotal Year For Recovery

Agriculture dealer inventory dropped over $700 million in the quarter due to retail sales support and a 34% cut in production hours. Proactive adjustments helped maintain margins.

North American industry volume fell 34% for tractors over 140 HP, fell 10% for tractors under 140 HP, and combines dropped 33%. EMEA saw tractor and combine demand down 6% and 31%, with Europe declining 8% and 11%, respectively.

Construction Segment net sales dropped 33% YoY to $718 million due to lower shipments and dealer destocking, mainly in North America.

Global heavy construction equipment demand rose 9%, while light equipment fell 4%. Demand was flat in North America, down 11% in EMEA, and up 14% in South America and 8% in Asia Pacific.

Financial Services revenues fell 3% due to lower equipment sales and currency impacts, partially offset by higher portfolio balances (excluding EMEA) and increased base rates in South America.

The managed portfolio was $27.8 billion as of December 31, 2024, down $1.1 billion year-over-year. Receivables greater than 30 days past due were down sequentially to 1.9%; however, they were elevated from 1.4% as of December 2023’s end, reflecting economic and environmental factors impacting farmers, specifically in South America.

“The challenging market conditions will continue at least through the first half of 2025, and we will keep production levels fairly low by design to drive channel inventory down further,” commented Gerrit Marx, Chief Executive Officer.

2025 Outlook: CNH expects lower global industry retail sales in agriculture and construction equipment markets in 2025. The company sees adjusted EPS of $0.65 – $0.75 vs. the consensus of $0.87. Also, the company expects 2025 net sales to be lower than in 2024.

The company expects the Agriculture segment net sales to decline 13% – 18%, with an adjusted EBIT margin of 8.5% – 9.5%.

Construction net sales are projected to drop 5% – 10%, with the Free Cash Flow of Industrial Activities between $200 million and $500 million.

Price Action: CNH shares traded higher by 3.50% at $13.00 at last check Tuesday.

Image via Shutterstock.