CNH Industrial beats profit Q2 estimates but flags bleaker outlook
2022.07.29 16:54
FILE PHOTO: Flags with CNH Industrial logo are pictured outside CNH Industrial building in Turin, Italy, February 5, 2020. REUTERS/ Massimo Pinca/File Photo
MILAN (Reuters) – Agricultural and construction machine maker CNH Industrial (NYSE:CNHI) beat estimates on Friday with a 14% rise in industrial operating profit in the second quarter, but said it anticipated a tougher outlook and was braced for recession in the Americas.
The Italian-American company, whose brands include Case IH, Steyr and New Holland, said adjusted earnings before interest and tax (EBIT) from industrial activities reached $654 million in the April-June period. That topped a $605 million forecast in an analyst poll compiled by Reuters.
“Pricing, volumes and favourable mix offset significant cost escalation,” Chief Executive Scott Wine said in a statement. He said CNH expected to meet its full-year guidance, but anticipated “a decidedly less advantageous climate for the next several quarters”.
By 1220 GMT Milan-listed shares in the group were up 2.3%, broadly in line with Italy’s blue chip index.
Wine cited the strong U.S. dollar impacting soft commodity prices, with potential further deterioration in farmer sentiment and income, and a possible decline of European industrial demand due to the war in Ukraine, energy risks and inflation.
“In the Americas, steady demand from cash-crop customers indicates that the market may be more stable, but overall we are positioning for a recession,” he added.
CNH Industrial, controlled by Agnelli family’s Exor (OTC:EXXRF), previously guided for full-year net sales in industrial activities to increase between 10% and 14% in 2022 and for a free cash flow of more than $1 billion.
The company “is substantially confirming” these forecasts, it said on Friday, without being more specific.
