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 ...

CNH Industrial (NYSE: CNH ) shares have dropped precipitously over the past two years, mirroring the commodity market and reflecting concerns over rising interest rates. The company's results are sure to be depressed in the near-term, but there are reasons toI manage a handful of portfolios, all of which have outperformed the S&P 500 index since inception in 2020. I like to evaluate businesses as a business - not a stock ticker - and invest when I judge the market to have significantly mispriced them. I hav ...

AE50 2025: Ten Ag innovations from CNH awarded by ASABE Basildon, January 9, 2024 Customer-inspired Ag Tech and Engineering solutions from CNH's Case IH and New Holland brands have won ten AE50 2025 awards. These awards honor the year's 50 most innovative products and systems engineered for the food and agricultural industries. Winners are determined by the American Society of Agricultural and Biological Engineers (ASABE). Our Winners Case IH The Axial-Flow (AF) 260 series combines bring together the lates ...

Following our last update, ' We Are Looking Ahead, Buy Confirmed ,' CNH Industrial's (NYSE: CNH ) stock price recovered by 11.95%. (Fig 1). After the Farm Progress expo in Iowa, we were pricing negative expectations on theBuy-side hedge professionals conducting fundamental, income oriented, long term analysis across sectors globally in developed markets. Please shoot us a message or leave a comment to discuss ideas.DISCLOSURE: All of our articles are a matter of opinion, informed as they might be, and must ...

CNH announces Global Leadership Team changes Basildon, December 16, 2024 CNH (NYSE:CNH) today announces leadership changes designed to capitalize on current market opportunities in its Agriculture business in the North America and Europe, Middle East and Africa (EMEA) regions. These developments will support the Company at this stage of the agricultural cycle, readying it for the upswing. Scott Harris will assume the role of President, North America, effective January 1, 2025. Markus Müller will join CNH a ...