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CNH Industrial (CNHI) Earnings Beat Estimates in Q1, Rise Y/Y

Zacks Equity Research

CNH Industrial N.V. CNHI reported adjusted earnings per share of 18 cents in first-quarter 2019, which rose 29% from the year-ago quarter. Moreover, the bottom line surpassed the Zacks Consensus Estimate of 15 cents.

Reportedly, adjusted net income rose to $248 million from $204 million recorded in first-quarter 2018.

Consolidated revenues declined 4.7% from the year-ago quarter to $6.46 billion. The figure missed the Zacks Consensus Estimate of $6.62 billion. The company’s net sales for Industrial Activities were $6 billion while adjusted EBITDA (earnings before interest, tax, depreciation and amortization) was $525 million.

CNH Industrial N.V. Price, Consensus and EPS Surprise

 

CNH Industrial N.V. Price, Consensus and EPS Surprise | CNH Industrial N.V. Quote

Segmental Performances

Net sales from the Agricultural Equipment segment declined 4% year over year to $2.5 billion. Moreover, the segment’s adjusted EBIT was $168 million, marking an $18-million decrease from the first quarter of 2018.

Construction Equipment segment’s sales declined 6.2% from the prior-year quarter to $640 million. The adjusted EBIT was $13 million.

Revenues from Commercial and Specialty vehicles slumped 3.2% from the prior-year quarter to $2.4 billion. The segment’s adjusted EBIT was $51 million, a slight increase from $49 million recorded in the prior-year quarter.

The Powertrain segment’s revenues declined 12.6% year over year to $1 billion. The segment’s adjusted EBIT was $96 million compared with $95 million in the first quarter of 2018.

Revenues from the Financial Services segment declined 5.6% year over year to $474 million. Adjusted EBIT was $131 million, marking a decline of $12 million from the prior-year quarter.

Financial Details

CNH Industrial had cash and cash equivalents of $3.7 billion as of Mar 31, 2019, compared with $5 billion as of Dec 31, 2018. The company’s debt was $23.8 billion as of Mar 31, 2019, compared with $24 billion as of Dec 31, 2018.

At the end of the first quarter of 2019, CNH Industrial’s net cash outflow from operations was $751 million compared with $74 million recorded a year ago.

Outlook

The company reiterated the projection for 2019. For the current year, it projects roughly $28 billion in Industrial Activities’ net sales and adjusted earnings per share are expected to be 84-88 cents.

Zacks Rank & Stocks to Consider

CNH Industrial currently carries a Zacks Rank #3 (Hold). A few better-ranked stocks in the broader auto sector are Gentex Corporation GNTX, Oshkosh Corporation OSK and Ford Motor Company F, each currently carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Gentex has an expected long-term growth rate of 6%. The stock has gained 18.1% in the past three months.

Oshkosh has an expected long-term growth rate of 11.6%. The stock has gained 3.3% in the past three months.

Ford has an expected long-term growth rate of 8.1%. Over the past three months, shares of the company have gained 23.7%.

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