On November 7, 2023, CNH Industrial NV (CNHI, Financial) released its earnings report for the third quarter of 2023. The company reported a 2% year-over-year increase in both consolidated revenue and net income, despite softer demand in certain product categories and South America. The company's Agriculture and Construction segments achieved record margins, reflecting the effectiveness of cost containment actions.
Financial Highlights
For the third quarter of 2023, CNH Industrial NV (CNHI, Financial) reported consolidated revenues of $5.99 billion, a 2% increase compared to Q3 2022. Net sales for Industrial Activities were $5.33 billion, a decrease of approximately 1% compared to Q3 2022. The company's net income was $570 million, with diluted earnings per share of $0.42. This compares with a net income of $559 million and diluted earnings per share of $0.41 for Q3 2022.
Segment Performance
The Agriculture segment's adjusted EBIT margin increased by 50 basis points year-over-year to 15.3%, despite a 3% decline in net sales. The Construction segment's adjusted EBIT margin increased by 360 basis points year-over-year to 6.3%, with net sales increasing by 6%. The Financial Services segment reported a 35% increase in revenue, largely due to favorable volumes and higher base rates across all regions.
Restructuring Program
CNH Industrial NV (CNHI, Financial) also announced an immediate restructuring program, which will be followed by a thorough review of its SG&A cost structure. The company aims to reduce its salaried workforce cost by 5% and expects a run rate reduction of 10-15% on total labor and non-labor SG&A expenses. The company expects to incur restructuring charges of up to $200 million.
Outlook
Given the softening of end market conditions, predominantly in South America, the company has revised its 2023 outlook for its Industrial Activities. It now expects net sales to increase between 3% and 6% year on year, including currency translation effects. The company also targets an adjusted diluted EPS of around $1.70.
Explore the complete 8-K earnings release (here) from CNH Industrial NV for further details.
