CNH Reports Lower Sales, Income
CNH Expects 2nd Quarter Lower Sales to Carry Through 2024
Poor financial results continue to flow from agricultural machinery manufacturers. Recently it has been John Deere announcing declining sales and major employee layoffs.
Wednesday, CNH Industries (Case IH, New Holland) announced poor 2024 second quarter financial results -- revenue down 16% on lower industry demand and second quarter net income down to $438 million compared to $710 million in the second quarter, 2023.
Agriculture net sales decreased for the quarter by 20% to $3.91 billion, primarily due to lower shipment volumes; that results from decreased industry demand and reduced demand from dealers. This, however, is partially offset by favorable price realization, CNH said. Price realization can be attained in the form of higher list prices, fewer discounts or additional charges. CNH did not say which, if any, applied to this report.
In North America, CNH reports 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. Combine volume was 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%.
Asia Pacific tractor demand was up 1% and combine demand was up 4%.
CNH is forecasting global industry retail sales will continue to be weaker in both the agriculture and construction equipment markets in the second half of 2024. CNH is continuing its efforts to improve margins with previously announced cost reduction programs focused on product costs (labor, material) and SG&A expenses (operating expenses) to partially offset the impact of the lower industry demand.
In its second quarter report, CNH announced it is updating its 2024 outlook. For agriculture, CNH is projecting net sales down between 15% and 20% year-over-year. In its construction segment, CNH projects net sales down between 15% and 20%, year-over-year.
CNH also is announcing its new Global Leadership Team. The Construction segment will operate as a distinct business unit inside CNH with increased autonomy, CNH says. Among the appointments effective today are:
--Gerrit Marx. Marx assumes direct responsibility for the Agriculture segment as CEO of CNH, encompassing the previous role of President, Agriculture. Marx recently rejoined CNH succeeding previous CNH CEO Scott Wine.
--Humayun Chishti. Chishti is appointed as President, Construction. Chishti joined CNH in 2002 and was previously the Finance Business Partner for Construction.
--Douglas MacLeod. MacLeod is confirmed as President, Financial Services. He has been with CNH for more than 15 years.
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