Leadership Transition - CNH announces Francesco Tutino as the new Chief Human Resources Officer (CHRO) effective May 1, 2025, succeeding Kelly Manley who served for 20 years [1][2] - Tutino has over 10 years of experience with CNH and Iveco Group, and was most recently Group Chief HR & Organization Officer at Prysmian [3] Contributions and Achievements - Kelly Manley contributed to establishing a strong company culture, advancing sustainability commitments, and achieving operational targets during her tenure [4] - The company expresses gratitude for Manley's leadership, which began in diversity and inclusion before transitioning to CHRO [4] Company Overview - CNH Industrial is a global leader in equipment, technology, and services, focusing on innovation, sustainability, and productivity [5] - The company offers a wide range of agricultural and construction products through its brands, including Case IH, New Holland, and others [5] - CNH has a diverse workforce of over 40,000 employees, committed to empowering customers and driving efficiency [6]

Financial Performance - Consolidated revenues for 2024 were $19,836 million, a decrease of 20% compared to $24,687 million in 2023[31]. - Net sales of industrial activities fell by 23% from $22,080 million in 2023 to $17,060 million in 2024[32]. - Net income for 2024 was $1,259 million, down 45% from $2,287 million in 2023[31]. - Diluted earnings per share decreased from $1.69 in 2023 to $0.99 in 2024, a decline of $0.70[32]. - As of December 31, 2024, the company reported a consolidated gross indebtedness of $26,882 million, with $23,173 million related to Financial Services activities[177]. - The funded status for the company's defined benefit pension plans showed a deficit of $356 million as of December 31, 2024[175]. - Rising interest rates could negatively impact customer demand for products and services, as well as customers' ability to service financing provided by the Financial Services segment[170]. - Negative economic conditions could lead to increased delinquencies and defaults, adversely affecting the performance of Financial Services and overall earnings[174]. Market Dynamics - The agriculture machinery industry is influenced by factors such as net farm income, government subsidies, and weather conditions[33]. - The construction equipment market is segmented into heavy and light construction equipment, with the former weighing more than 12 metric tons[40]. - In developed markets, customers prefer sophisticated machines with advanced technology, while in developing markets, cost-effective and durable equipment is favored[41]. - The demand for heavy construction equipment is closely linked to government spending and economic growth, with a significant portion tied to infrastructure projects[45]. - The light construction equipment market is influenced by residential and commercial construction levels, which are affected by interest rates and financing availability[47]. - The agricultural equipment market is cyclical and influenced by factors such as farm income, commodity prices, and weather conditions, which can adversely affect demand for agricultural equipment[115]. - Climate change and unfavorable weather conditions could significantly affect agricultural equipment purchasing decisions, impacting demand for the company's products[133]. Strategic Initiatives - The company acquired Augmenta in 2023, enhancing its capabilities in automating and optimizing farming operations[21]. - CNH began production of full-electric compact construction equipment in 2023, including electric mini excavators and compact wheel loaders[29]. - A multi-year supply chain transformation program was initiated in 2023 to enhance supplier relationships and foster co-development initiatives[70]. - The company plans to invest significantly in research and development to enhance precision technology solutions, including automation and electrification, to remain competitive in the market[126]. - A new Global Leadership Team has been established to focus on profitable long-term growth, particularly in the Agriculture segment, but the implementation may involve complexities and risks[130]. Financial Services - Financial Services segment provides wholesale financing to dealers and distributors, primarily for inventory financing[30]. - Financial Services offers a range of financing products, including retail notes and dealer floorplan financing, to support equipment sales and customer loyalty[71]. - Financial Services funds operations through term receivable securitizations, secured and unsecured facilities, and retained earnings[85]. - Dealer financing includes a fixed period of "interest-free" financing, with costs recognized as a reduction in net sales[81]. - Financial Services' minimum down payment guidelines for equipment range from 5% to 30% based on various factors[80]. Operational Challenges - The company faces risks from global economic conditions, including changes in interest rates and inflation, which could negatively impact demand for its products[114]. - Competitive activity in the agricultural and construction equipment markets has intensified, with competitors potentially offering products at lower prices, affecting the company's market position[123]. - The company is exposed to political and economic risks due to its global operations, which may impact manufacturing and sales capabilities[116]. - Changes in government policies, such as subsidies and trade agreements, can significantly influence the company's revenue and operational strategies[125]. - The company relies on suppliers for raw materials, and disruptions in the supply chain could adversely affect manufacturing capabilities and costs[141]. - Fluctuations in the availability and price of raw materials, such as steel and aluminum, could lead to increased production costs, adversely affecting financial performance[143]. - Dealer inventory management decisions could negatively impact sales if dealers do not maintain sufficient inventory to meet customer demand[146]. Compliance and Regulatory Risks - The company is subject to increased regulatory scrutiny and reporting requirements, which may raise compliance costs and risks of investigations[148]. - The company faces significant cybersecurity risks, including threats from malware and phishing attacks, which could compromise confidential information and negatively impact operations[150]. - A material weakness in internal control over financial reporting has been identified, specifically related to IT general controls and inventory management, which could affect the accuracy of financial reporting[164]. - Compliance with increasingly stringent environmental regulations is expected to incur substantial costs, impacting the company's ability to sell products in certain jurisdictions[156]. - The company is subject to extensive laws and regulations, including anti-corruption and antitrust laws, which could lead to investigations and penalties, adversely affecting business operations[159]. - Difficulty in obtaining financing or refinancing existing debt could negatively impact financial performance, especially in unfavorable market conditions[165]. Shareholder Information - The company’s common stock was listed on the NYSE under the symbol "CNH" as of May 20, 2024, transitioning from "CNHI" and previously listed on Euronext Milan[205]. - As of January 31, 2025, there were 407 registered holders of the company's common stock, excluding those holding shares through brokers and other nominees[206]. - The cumulative total shareholder return for the company was $130 for the five-year period ending December 31, 2024, compared to $164 for the S&P Midcap 400 Index[208]. - The company maintains a dividend policy allowing for annual dividends of 25-35% of consolidated net income, with future payments dependent on earnings and financial condition[209]. - In February 2024, the company authorized a $500 million share buyback program effective March 1, 2024, allowing for repurchase of common shares based on market conditions[211]. Employee and Diversity Initiatives - Employee count as of December 31, 2024, is 35,850, including 10,342 in the U.S. and Canada[89]. - CNH's commitment to diversity and inclusion was formalized in a policy adopted in 2023[91]. - The company aims for a zero-accident and zero-injury rate in its occupational health and safety initiatives[94]. - Employee compensation includes base salary, benefits, and performance-based incentives, aligned with market benchmarks[95]. - The ability to attract and retain qualified personnel is critical for executing business strategy and expansion, with potential impacts from higher employee turnover rates[155].

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]

Q4 2024 RESULTS REVIEW February 4, 2025 SAFE HARBOR STATEMENT AND DISCLOSURES All statements other than statements of historical fact contained in this presentation including competitive strengths; business strategy; future financial position or operating results; budgets; projections with respect to revenue, income, earnings (or loss) per share, capital expenditures, dividends, liquidity, capital structure or other financial items; costs; and plans and objectives of management regarding operations and prod ...

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]

CNH Industrial (CNH) Q4 2024 Earnings Call February 04, 2025 09:00 AM ET Company Participants Jason Omerza - VP of Investor RelationsGerrit Marx - CEO & Head of AgricultureOddone Incisa - CFOTami Zakaria - Executive DirectorAngel Castillo - Executive DirectorDavid Raso - Senior Managing Director & PartnerJamie Cook - Managing Director - Equity ResearchDaniela Costa - Managing DirectorAvi Jaroslawicz - Equity Research Associate Conference Call Participants Mircea Dobre - Associate Director of Research & Seni ...

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]