CNH Industrial (CNH) Q3 2024 earnings summary

Executive summary

• Q3 2024 marked a 22% year-over-year revenue decline to $4.65 billion, driven by weak industry demand, depressed commodity prices, and elevated dealer inventories, with net income falling 43% to $310 million and EPS at $0.24.

• Cost-saving initiatives, strategic sourcing, and operational improvements continued, including a $100 million spend on field quality priorities and ongoing share buybacks, reducing share count by 7% since January 2023.

• Inventory management remains a focus, with underproduction to retail demand expected through H1 2025 and production alignment anticipated by H2 2025.

• New product launches and technology initiatives, such as FieldOps, are progressing, with continued investment in R&D and footprint simplification.

• Prior periods were revised for an immaterial correction related to highly inflationary accounting in Türkiye.

Financial highlights

• Q3 consolidated revenues fell 22% year-over-year to $4.7 billion; Industrial Activities net sales dropped 25% to $4.0 billion.

• Adjusted EBIT for Industrial Activities was $336 million (down 46%), with margin at 8.4% (down 340 bps); adjusted net income was $304 million (down 44%).

• Diluted EPS was $0.24, down from $0.40 last year.

• Free cash flow from Industrial Activities was an outflow of $180 million, consistent with seasonal trends and lower activity.

• Gross margin for Industrial Activities declined to 21.7% from 23.9% year-over-year.

Outlook and guidance

• Full-year 2024 Agriculture net sales expected to decline 22–23% year-over-year; adjusted EBIT margin forecast at 10.5–11.5%.

• Construction net sales forecasted down 21–22% year-over-year; adjusted EBIT margin expected at 5–6%.

• Industrial EBIT margin for the year forecasted at 8–9%; free cash flow expected to be negative $100–300 million.

• Adjusted diluted EPS guidance for the year is $1.05–1.15, with $0.08 of the change due to accounting revision.

• Underproduction to retail demand will likely continue through H1 2025, with production expected to align with retail by H2.