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CNH Industrial's (CNHI) Q2 Earnings Beat Estimates, Rise Y/Y

Zacks Equity Research

CNH Industrial N.V. CNHI reported adjusted earnings per share of 31 cents in second-quarter 2019, which rose 11% from the year-ago quarter’s figure. Moreover, the bottom line surpassed the Zacks Consensus Estimate of 29 cents.

Reportedly, adjusted net income rose to $430 million from $397 million recorded in second-quarter 2018.

Consolidated revenues declined 5.9% from the year-ago quarter’s level to $7.57 billion. The figure missed the Zacks Consensus Estimate of $7.83 billion. The company’s net sales for Industrial Activities were $7.1 billion and adjusted EBITDA (earnings before interest, tax, depreciation and amortization) was $527 million.

Segmental Performances

Net sales in the Agricultural Equipment segment declined 7% year over year to $3.1 billion. Moreover, the segment’s adjusted EBIT was $341 million, down $55 million from the year-ago quarter’s tally.

Construction Equipment segment’s sales declined 5.3% year over year to $757 million. The adjusted EBIT was $25 million from $33 million recorded in the year-ago quarter.

Revenues in the Commercial and Specialty vehicles slumped 6.6% year over year to $2.7 billion. The segment’s adjusted EBIT was $100 million, up from $92 million recorded in the prior-year quarter.

The Powertrain segment’s revenues declined 7% year over year to $1.1 billion. The segment’s adjusted EBIT was $102 million compared with $108 million in the second quarter of 2018.

Revenues from the Financial Services segment declined 4.2% year over year to $519 million. Adjusted EBIT was $124 million, down $17 million from the prior-year quarter’s figure.

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

 

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

CNH Industrial N.V. price-consensus-eps-surprise-chart | CNH Industrial N.V. Quote

 

Financial Details

CNH Industrial had cash and cash equivalents of $3.7 billion as of Jun 30, 2019 compared with $5 billion as of Dec 31, 2018. The company’s debt was $24.4 billion as of Jun 30 compared with $24 billion as of Dec 31, 2018.

At the end of the second quarter, CNH Industrial’s net cash outflow from operations was $503 million compared with cash inflow of $727 million in the prior-year quarter.

Outlook

The company reiterated its projection for 2019. For the current year, it projects roughly $27-$27.5 billion in Industrial Activities’ net sales and adjusted earnings per share are expected in the range of 84-88 cents. Net debt of Industrial Activities at the end of 2019 is expected between $200 million and $400 million.

Zacks Rank & Stocks to Consider

Currently, CNH Industrial has a Zacks Rank #5 (Strong Sell).

Some top-ranked stocks in the auto space worth considering are Copart, Inc CPRT, CarMax, Inc KMX and Gentex Corporation GNTX. While Copart sports a Zacks Rank #1 (Strong Buy), CarMax and Gentex carry a Zacks Rank #2 (Buy). You can see  the complete list of today’s Zacks #1 Rank stocks here.

Copart has an expected long-term growth rate of 20%. In the past year, shares of the company have rallied 33.3%.

CarMax has an expected long-term growth rate of 12.6%. In the past year, shares of the company have moved up 17.9%.

Gentex has an expected long-term growth rate of 5%. In the past year, shares of the company have returned 18.7%.

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