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CNH: Strong Agricultural Equipment Sales Offset Weak Construction Market

October 31, 2012, 07:23 AM
Filed Under: Corporate Earnings

CNH Global announced financial results for the quarter ended September 30, 2012. Net sales for the quarter increased 5% (11% on a constant currency basis) to $4.8 billion as global demand for agricultural equipment remained solid, driven by high commodity prices offsetting the effects of a severe drought in North America.

Strong agricultural equipment sales more than offset the reduction in sales of construction equipment due to challenging market conditions in most geographies and the negative effects of foreign currency translation.

Equipment net sales during the quarter were 83% agricultural equipment and 17% construction equipment. The geographical distribution of net sales in the quarter was 46% North America, 27% EAME & CIS, 15% Latin America, and 12% APAC markets.

Construction Equipment - CNH's construction equipment third quarter 2012 net sales decreased 14% on a constant currency basis (-21% on a reported basis) as industry recovery slowed considerably in every region with Latin America decreasing 12% year-over-year in the quarter and the APAC market continuing to be down for the third consecutive quarter. Reduced commercial volumes and industrial capacity absorption and adverse currency impact resulted in a $15 million operating loss for the quarter.

Agriculture Equipment - CNH's third quarter net sales of agricultural equipment increased 18% on a constant currency basis (12% on a reported basis) driven by increased volume, positive net pricing, and favorable product mix. All of the Group's geographic regions reported increased revenue on a constant currency basis. Operating profit increased by $68 million to $479 million at an operating margin of 12.0%, up 50 basis points from the comparable 2011 period.

Read the full CNH Global earnings press release.

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