CNH Industrial Shares Drop Amid Lowered Profit Forecast

(Reuters) – Shares of CNH Industrial (NYSE:CNH) fell more than 10% premarket on Friday after the farm and construction equipment maker missed third-quarter profit estimates and cut its 2024 profit forecast due to weak demand and reduced dealer inventory requirements.

The company trimmed its annual adjusted profit view to the range of $1.05 to $1.15 per share from the previously expected $1.30 to $1.40, marking the third consecutive quarter of lowered forecasts.

CNH expects annual sales in its agriculture segment to be down between 22% and 23% compared to a year earlier, down from an earlier projection of 15% to 20%. A record crop harvest has kept grain inventories elevated and pressured crop prices, which, coupled with higher input costs, has prompted farmers to delay equipment purchases. This delay has, in turn, forced dealers to moderate product restocking, causing equipment makers like CNH Industrial to reduce production.

Despite the challenges, the Basildon, UK-based company's quarterly revenue, though down 22.3% at $4.65 billion from a year ago, beat analysts' average estimate of $4.58 billion according to data compiled by LSEG.

Persistent weakness in farm incomes worldwide has dented demand for new equipment in most global markets. Sales of CNH's tractors declined 12% in South America during the third quarter, while sales fell 20% in Europe, the Middle East, and Africa. Combine sales dropped 32% and 50% in the two regions, respectively.

CNH, known for its New Holland brand of farm equipment, reported an adjusted third-quarter profit of 24 cents per share, falling short of the estimates of 27 cents. Peer AGCO also recently provided full-year profit and revenue forecasts below estimates, affected by weak demand as lower farm income persists for crop producers.