CNH Industrial makes profit in Q3 despite fall in revenues
Construction equipment division reports marginal growth as profits rise in commercial vehicles despite lower sales
CNH Industrial, the owner of the Case Construction Machinery and Iveco commercial vehicles brands, has reported revenues of $5.7 billion for the third quarter of 2016, down 1.7% over the same period last year.
Adjusted net income was $68 million for the quarter, up 79% compared to the third quarter of 2015.
The group’s construction equipment division reported an increase of 0.7% in sales for the period, driven by favorable volumes in the Asia Pacific region, which partially offset lower sales in the Americas. Operating profit for the division was $1m in Q3 compared to $37 million in the third quarter of 2015, which the company attributed to an unfavorable market and product mix, and negative price realisation primarily in the NAFTA countries.
The commercial vehicles division, meanwhile, saw a drop of 3.4% in sales in the quarter to $2.1bn but profits increased by 3% over the same period last year to $64m. The company blamed the drop in sales primarily to lower volumes in all ranges in Latin America, mainly due to continuing deterioration of market conditions in Brazil and the Euro V pre-buy impact in the Argentinian market in the second half of 2015. Net sales were also flat in EMEA as a volume increase in trucks was offset by decreases in buses and specialty vehicles.
Operating profit for the division was $64m for the third quarter of 2016 compared to $60m in the third quarter of 2015. CNH said the increase was due to positive pricing and manufacturing efficiencies in EMEA trucks and buses.
“Our third quarter results were consistent with our expectations,” said Richard Tobin, CEO of CNH Industrial. “Despite the challenging demand environment we have been able to increase our comparable profit margins for the quarter as a result of proactive cost control measures. Our commercial vehicles business continues to gain market share in Europe as our new vehicle product launches continue to gain traction in the market.”
