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CAPITAL GOODS: CNH Industrial (Baa2/BBB+/BBB+): 3Q24 Results

CAPITAL GOODS
USCredit BulletsBulletGlobalRegionNorth America

Credit negative. We flagged risk on Tuesday when AGCO reported; another weak quarter and profit warning for CNH.

  • CNH reported revenue 3% below consensus, down 21% YoY LfL.
  • Industrial adj. EBIT fell 46% YoY and missed by 14%. Margin was 440bp s lower YoY. Agri volumes were double digits lower in all regions with poor demand due to low crop prices and elevated dealer inventory.
  • Industrial net debt at $2.7bn, which was close to zero at FY23.
  • FY24 Agriculture guidance lowered; sales to 22-23% from 15-20% (consensus -19%). Adj. EBIT margin to 10.5-11.5% from 13-14% (consensus 13.2%).

WC will increase due to declining production. FY FCF is now expected in a -$100mn to -$300mn range from +$700mn to +$900mn previously. That should impact net debt by more than 0.5 turns.

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Credit negative. We flagged risk on Tuesday when AGCO reported; another weak quarter and profit warning for CNH.

  • CNH reported revenue 3% below consensus, down 21% YoY LfL.
  • Industrial adj. EBIT fell 46% YoY and missed by 14%. Margin was 440bp s lower YoY. Agri volumes were double digits lower in all regions with poor demand due to low crop prices and elevated dealer inventory.
  • Industrial net debt at $2.7bn, which was close to zero at FY23.
  • FY24 Agriculture guidance lowered; sales to 22-23% from 15-20% (consensus -19%). Adj. EBIT margin to 10.5-11.5% from 13-14% (consensus 13.2%).

WC will increase due to declining production. FY FCF is now expected in a -$100mn to -$300mn range from +$700mn to +$900mn previously. That should impact net debt by more than 0.5 turns.