CNH Industrial (CNH) Q2 2024 earnings summary

Executive summary

• Q2 2024 consolidated revenue declined 16% year-over-year to $5.49 billion, with net income at $438 million, reflecting lower industry demand and reduced dealer inventory requirements.

• Agriculture and Construction segments both saw double-digit sales declines, with Agriculture down 20% and Construction down about 16% year-over-year; Financial Services revenue rose but net income fell due to higher delinquencies in South America.

• Cost savings initiatives, restructuring, and SG&A reductions partially offset market headwinds; $1.2 billion returned to shareholders in H1 2024 via dividends and share repurchases.

• Leadership transition with new CEO focusing on agriculture as the core business and construction as a more autonomous segment; new Global Leadership Team announced in July 2024.

• Ongoing focus on brand positioning, technology, and operational efficiency.

Financial highlights

• Net sales of Industrial Activities fell 19% year-over-year to $4.80 billion in Q2; consolidated revenues were $5.49 billion.

• Adjusted net income was $485 million; adjusted EPS at $0.38, down from $0.52 last year.

• Adjusted EBIT for Industrial Activities was $536 million (down from $822 million); margin at 11.2%.

• Free cash flow for Industrial Activities was $140 million, down from $386 million in Q2 2023.

• Cash and cash equivalents at June 30, 2024: $2.0 billion, down from $4.3 billion at year-end 2023.

Outlook and guidance

• Full-year 2024 guidance updated: Agriculture and Construction net sales expected to decline 15–20% year-over-year; Industrial net sales expected to be down 15–20%.

• Adjusted EBIT margin guidance for Industrial Activities lowered to 10.0–11.0%; Agriculture margin forecasted at 13.0–14.0%; Construction margin reaffirmed at 5.0–6.0%.

• Free cash flow guidance reduced to $0.7–$0.9 billion; adjusted EPS forecasted between $1.30 and $1.40.

• Global industry retail sales for agriculture and construction equipment projected to remain weak in H2 2024.

• Restructuring charges expected to total up to $180 million through 2024.