Core Insights - CNH has been recognized by S&P Global as ranking in the top 5% of its industry in the 2025 Sustainability Yearbook, achieving the second highest performance in its industry group [1][2] - The company scored 79 out of 100 in the Machinery and Electrical Equipment Industry category and has also been included in S&P Global's Dow Jones Sustainability World and North America Indices [2] Sustainability Efforts - CNH emphasizes its commitment to sustainability by focusing on technologies that enhance efficiency and reduce environmental impact, including automation and sensor technologies in its products [4] - The company has made significant strides in cutting carbon emissions, increasing renewable energy use, and expanding remanufacturing efforts [4] - Recent product innovations include the launch of the industry's first electric backhoe loader, which offers zero noise and zero emissions solutions [4] Recognition and Awards - CDP has awarded CNH A- scores for Climate and Water in its 2024 results, highlighting the company's environmental performance [5] - The company has a long history of innovation and customer efficiency, with over 40,000 employees contributing to its diverse and inclusive workplace [6] Company Overview - CNH Industrial is a global leader in equipment, technology, and services, focusing on innovation, sustainability, and productivity [5] - The company operates various brands, including Case IH, New Holland, CASE, and New Holland Construction Equipment, providing a comprehensive range of agricultural and construction products [5]

Company Overview - CNH Industrial is the second-largest farming equipment manufacturer globally, indicating a strong position in the agricultural sector [1]. Industry Insights - The agricultural equipment business exhibits significant cyclicality, presenting potential investment opportunities during different phases of the cycle [1]. Investment Strategy - The focus is on long-term growth and dividend growth investing, emphasizing the importance of profitability over low valuation [1]. - Key metrics for evaluation include margins, free cash flow stability and growth, and returns on invested capital [1].

Core Insights - CNH Industrial reported a significant decline in fourth-quarter 2024 adjusted earnings per share (EPS) of 15 cents, down from 42 cents in the prior-year quarter, and missed the Zacks Consensus Estimate of 19 cents [1] - Consolidated revenues for the fourth quarter fell nearly 28% year over year to $4.88 billion, also missing the consensus mark of $4.89 billion [1] Segmental Performance - The Agriculture segment experienced a 31% year-over-year decline in net sales to $3.41 billion, missing the estimate of $3.43 billion, with adjusted EBIT down 62% to $244 million [3] - The Construction segment's sales dropped 33% year over year to $718 million, missing the estimate of $756 million, with adjusted EBIT down 71% to $18 million [4] - The Financial Services segment's revenues fell 3% to $743 million but surpassed the estimate of $648.8 million, with net income decreasing to $92 million from $113 million in the prior year [5] Financial Details - As of December 31, 2024, CNH Industrial had cash and cash equivalents of $3.19 billion, down from $4.32 billion a year earlier, while total debt decreased to $26.88 billion from $27.33 billion [6] - The company reported net cash provided by operating activities of $1.69 billion, an increase from $1.51 billion in the previous year [6] - Free cash flow from industrial activities was $848 million in the fourth quarter, down from $1.63 billion in the same quarter of 2023 [7] Guidance for 2025 - For 2025, Agriculture sales are expected to decrease by 13-18%, compared to a 23% decline in 2024, with adjusted EBIT margin projected between 8.5-9.5% [8] - Construction segment sales are anticipated to decline by 5-10% year over year, compared to a 22% decline in 2024 [8] - The company expects free cash flow from industrial activities to range between $200-$500 million, contrasting with a free cash outflow of $401 million in 2024, and adjusted EPS is projected between 65 cents and 75 cents, down from 99 cents in 2024 [9]

Financial Performance - Q4 2024 - Consolidated Revenues were $4.9 billion, a decrease of 28% year-over-year[8] - Industrial Activities Net Sales reached $4.1 billion, down 31% year-over-year[8] - Adjusted EBIT for Industrial Activities was $194 million, a 71% decrease compared to Q4 2023[8] - Net Income amounted to $176 million, representing a 70% decline year-over-year[8] - Adjusted Diluted EPS was $0.15, a decrease of $0.24 compared to Q4 2023[8] Financial Performance - FY 2024 - Consolidated Revenues totaled $19.8 billion, a 20% decrease year-over-year[11] - Industrial Activities Net Sales were $17.1 billion, down 23% compared to FY 2023[11] - Adjusted EBIT for Industrial Activities was $1.4 billion, a 47% decrease year-over-year[11] - Net Income reached $1.3 billion, representing a 45% decline compared to the previous year[11] - Adjusted Diluted EPS was $1.05, a decrease of $0.58 compared to FY 2023[11] Key Achievements & Outlook - Dealer inventory reduced by over $700 million[6] - The company anticipates net sales for Industrial Activities to decrease by 17%-12% year-over-year in 2025[37]

Core Insights - CNH Industrial reported a revenue of $4.88 billion for the quarter ended December 2024, reflecting a decline of 28.2% year-over-year and a slight miss of 0.28% against the Zacks Consensus Estimate of $4.89 billion [1] - The earnings per share (EPS) for the quarter was $0.15, down from $0.42 in the same quarter last year, resulting in an EPS surprise of -21.05% compared to the consensus estimate of $0.19 [1] Revenue Breakdown - Total Industrial Activities in Agriculture generated $3.41 billion, exceeding the average estimate of $3.38 billion but down 31.1% year-over-year [4] - Total Industrial Activities in Construction reported revenues of $718 million, below the average estimate of $733.34 million, marking a 33% decline from the previous year [4] - Net Sales amounted to $4.13 billion, slightly below the average estimate of $4.16 billion, representing a 31.4% decrease year-over-year [4] - Finance, interest, and other income reached $747 million, surpassing the average estimate of $732.63 million, but down 3.5% year-over-year [4] - Financial Services revenues were $743 million, closely matching the average estimate of $743.95 million, with a year-over-year decline of 3.3% [4] - Total Industrial Activities revenue was $4.16 billion, in line with the average estimate, but down 31.5% compared to the year-ago quarter [4] - Eliminations reported a loss of $28 million, significantly worse than the average estimate of $2.45 million, reflecting a 40.4% decline year-over-year [4] Adjusted EBIT Performance - Adjusted EBIT for Industrial Activities in Agriculture was $244 million, below the average estimate of $283.61 million [4] - Adjusted EBIT for Industrial Activities in Construction was $18 million, exceeding the average estimate of $15.69 million [4] - Adjusted EBIT for Unallocated items, eliminations, and other activities was -$68 million, worse than the average estimate of -$54.82 million [4] - Total Adjusted EBIT for Industrial Activities was $194 million, falling short of the average estimate of $250.97 million [4] Stock Performance - CNH shares have returned +10.6% over the past month, outperforming the Zacks S&P 500 composite, which saw a +1% change [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating expected performance in line with the broader market in the near term [3]

Financial Data and Key Metrics Changes - Full year 2024 consolidated revenues decreased by 20% and industrial net sales fell by 23% compared to 2023 [11] - Industrial adjusted EBIT margin for the full year was 8.2%, down 370 basis points from 2023, primarily due to lower volumes [11] - Q4 net sales of industrial activities were down 31% year over year to $4.1 billion, driven by decreased equipment deliveries [16] - Full year net income was $1.3 billion with EPS at $1.05, down from $0.39 in Q4 2023 [16] Business Line Data and Key Metrics Changes - In agriculture, net sales decreased by 31% in Q4 and 23% for the full year, with production hours down 34% year over year in Q4 [17][18] - Construction segment saw a 33% drop in Q4 net sales, but gross margins remained flat year over year [21] - Financial Services net income for Q4 was $92 million, a decrease of $21 million compared to Q4 2023, but full year net income increased to $379 million [22][24] Market Data and Key Metrics Changes - Global industry demand is expected to decline by 5% to 10% from 2024, with a more significant decline of 10% to 15% anticipated for the company due to high exposure to cash crop equipment in North America [31] - Dealer inventories in North America are still above target levels, with about 1.5 months of new equipment inventory above expectations [31][93] Company Strategy and Development Direction - The company is focused on reducing channel inventories and maintaining pricing discipline, planning to underproduce to retail demand at least through the first half of 2025 [8][10] - A significant emphasis is placed on quality improvements and operational efficiencies, with a run rate savings of about $600 million achieved by the end of 2024 [9][25] - The company aims to maintain a healthy balance sheet while investing in product and technology advancements [28] Management's Comments on Operating Environment and Future Outlook - Management acknowledged that 2024 was a challenging year due to depressed commodity prices affecting farm income and equipment demand [11][10] - The outlook for 2025 includes expectations of continued low production levels and a focus on upgrading production lines and processes [32] - Management remains cautious about geopolitical uncertainties and their potential impact on the business [26][39] Other Important Information - The company plans to maintain its annual dividend and share repurchase program in 2025, returning approximately $1.3 billion to shareholders in 2024 [28] - R&D expenses are expected to be slightly lower in 2025, around €800 million, benefiting from structural efficiencies [36] Q&A Session Summary Question: Pricing expectations for the two segments in 2025 - Management expects full year pricing to be flat to slightly positive, with the first half being flat to slightly down and the second half showing low to mid-single-digit price increases [43][44] Question: Impact of trade tariffs and production options - Management is analyzing the potential impact of tariffs on imports and is considering reshoring some assembly processes to the U.S. [46][48] Question: Core decremental margins and production versus retail plans - Management indicated that they expect to recover warranty costs throughout 2025, impacting decremental margins positively [57][58] - Production is expected to be down 10% to 15% in the first half of 2025, with a potential recovery in the second half [62] Question: Margin cadence within agriculture for 2025 - Management anticipates lower margins in the first half of 2025, with a recovery expected in the second half, returning to double-digit margins [77][79] Question: Targeted incentive programs for 2025 - The company plans to continue targeted commercial actions to reduce aged inventory and align inventory levels with market demand [86][88]

Group 1: Earnings Performance - CNH Industrial reported quarterly earnings of $0.15 per share, missing the Zacks Consensus Estimate of $0.19 per share, and down from $0.42 per share a year ago, representing an earnings surprise of -21.05% [1] - The company posted revenues of $4.88 billion for the quarter ended December 2024, missing the Zacks Consensus Estimate by 0.28%, and down from $6.79 billion year-over-year [2] - Over the last four quarters, CNH has surpassed consensus EPS estimates just once and topped consensus revenue estimates only once [2] Group 2: Stock Performance and Outlook - CNH shares have increased approximately 10.9% since the beginning of the year, outperforming the S&P 500's gain of 1.9% [3] - The company's earnings outlook, including current consensus earnings expectations for upcoming quarters, will be crucial for investors [4] - The current consensus EPS estimate for the coming quarter is $0.15 on revenues of $3.97 billion, and for the current fiscal year, it is $0.90 on revenues of $17.73 billion [7] Group 3: Industry Context - The Manufacturing - Farm Equipment industry, to which CNH belongs, is currently in the bottom 26% of over 250 Zacks industries, indicating potential challenges ahead [8] - The performance of CNH's stock may be influenced by the overall outlook for the industry [8] - Another competitor in the same industry, Deere, is expected to report a significant decline in earnings, with a projected EPS of $3.14, down 49.6% year-over-year [9]

Financial Performance - Fourth quarter consolidated revenues decreased by 28% to $4.88 billion, and full year consolidated revenues declined by 20% to $19.84 billion[1][3][16] - Fourth quarter net income was $176 million, a 70% decrease compared to $583 million in Q4 2023; full year net income was $1,259 million, down 45% from $2,287 million in 2023[1][3][16] - Full year diluted EPS was $0.99, down from $1.69 in 2023; adjusted diluted EPS was $1.05 compared to $1.63 in the previous year[1][3][16] - The company reported a net income of $176 million for Q4 2024, compared to $583 million in Q4 2023, representing a decrease of 69.8%[33] - Net income for the year ended December 31, 2024, was $1,259 million, a decrease of 44.8% compared to $2,287 million in 2023[42] - Adjusted net income for the year was $1,339 million, compared to $2,217 million in the previous year, reflecting a decline of approximately 39.5%[55] - The adjusted diluted EPS for the year was $1.05, down from $1.63 in 2023, representing a decrease of about 35.4%[55] Segment Performance - Agriculture segment net sales fell by 31% to $3.41 billion in Q4 2024, with adjusted EBIT decreasing to $244 million from $635 million in Q4 2023[6][7][16] - Construction segment net sales decreased by 33% to $718 million in Q4 2024, with adjusted EBIT down to $18 million from $62 million in Q4 2023[8][9][16] - Adjusted EBIT for Industrial Activities in Q4 2024 was $194 million, a 71% decrease from $662 million in Q4 2023, with an adjusted EBIT margin of 4.7%[3][4][16] - The Agriculture segment's adjusted EBIT for the year ended December 31, 2024, was $1,470 million, down from $2,636 million in 2023[50] - The Construction segment's adjusted EBIT for the year ended December 31, 2024, was $169 million, a decrease from $238 million in 2023[50] Revenue and Sales Forecast - The company forecasts a decline in global industry retail sales for both agriculture and construction equipment markets in 2025, with net sales expected to be lower than in 2024[17][18][19] - Agriculture segment net sales are projected to decrease between 13% and 18% year-over-year in 2025, while construction segment net sales are expected to decline between 5% and 10%[19] Cash Flow and Assets - Cash flows from operating activities increased to $1,968 million in 2024, compared to $907 million in 2023, reflecting a significant improvement[37] - Cash flows from operating activities for the year ended December 31, 2024, were $1,968 million, compared to $907 million in 2023, indicating a significant increase[53] - Free cash flow of Industrial Activities for the year ended December 31, 2024, was $1,216 million, a decrease from $1,630 million in 2023[53] - CNH's total assets decreased to $42,933 million as of December 31, 2024, from $46,267 million in 2023, a reduction of 7.9%[35] - Cash and cash equivalents decreased to $3,191 million in 2024 from $4,322 million in 2023, a decline of 26.1%[35] Liabilities and Debt - The company's total liabilities also decreased to $35,165 million in 2024, down from $38,117 million in 2023, a decline of 7.7%[35] - Total debt as of December 31, 2024, was $26,944 million, a slight decrease from $27,472 million in 2023[51] - The company reported a net increase in debt of $1,242 million for the year ended December 31, 2024, compared to a decrease of $3,788 million in 2023[48] Research and Development - Research and development expenses for Q4 2024 were $238 million, down from $275 million in Q4 2023, a decrease of 13.5%[33] - Research and development expenses for the year ended December 31, 2024, were $924 million, a decrease of 11.3% from $1,041 million in 2023[42] Restructuring and Adjustments - The company incurred restructuring expenses of $24 million in Q4 2024, compared to $59 million in Q4 2023, reflecting a reduction of 59.3%[33] - The company reported restructuring expenses of $118 million for the year, with adjustments impacting income before income tax totaling $97 million[55] - The company has revised prior periods' results due to an overstatement of equity in income of unconsolidated subsidiaries by $96 million in 2023 and $67 million in the first half of 2024[22] Foreign Exchange and Other Impacts - The company experienced a foreign exchange loss of $8 million in 2024, compared to a gain of $105 million in 2023[50]

Core Viewpoint - CNH Industrial's earnings are expected to reach a low point in 2025 after experiencing two years of declining equipment sales, with an upgrade in rating from Perform to Outperform and a price target set at $16 by Oppenheimer's analyst Kristen Owen [1][2]. Group 1: Earnings Outlook - The third-quarter earnings season has positively influenced investor sentiment, with incremental catalysts anticipated in 2025 that may support a reversion trade for CNH [2]. - Despite challenging equipment fundamentals in 2025, recent improvements in grain prices could serve as a tailwind for global farm income [3]. Group 2: Company-Specific Catalysts - Potential catalysts for CNH Industrial include incremental cost savings programs, an investor day in May, and possible monetization of construction assets [4]. - At the time of publication, CNH Industrial shares were down 0.3% to $13.12 [4].

CNH Industrial (CNH) is expected to deliver a year-over-year decline in earnings on lower revenues when it reports results for the quarter ended December 2024. This widely-known consensus outlook gives a good sense of the company's earnings picture, but how the actual results compare to these estimates is a powerful factor that could impact its near-term stock price.The stock might move higher if these key numbers top expectations in the upcoming earnings report, which is expected to be released on February ...