CNH Industrial lowers guidance and announces job cuts, shares fall
By Bianca Flowers and Alessandro Parodi
(Reuters) -Agricultural and construction machinery maker CNH Industrial (NYSE:CNHI) on Tuesday lowered its 2023 revenue forecast, citing a softening for its farm machinery, predominantly in South America, sending its shares plummeting.
The company also announced a restructuring plan that will entail trimming 5% of its salaried workforce costs and it expects to reduce its total workforce by 10% to 15%.
Shares were repeatedly halted from trading in Milan due to volatility after the company revised its sales outlook for the year, and were last down 14%, its lowest since 2021.
The Italian-American company lowered its net revenue forecast from industrial activities, which accounts for the majority of CNH's revenue, of between 3-6% this year, down from a previous forecast of 8-11%. The manufacturer also changed its free-cash flow estimate to be between $1 and $1.2 billion from $1.3 to 1.5 billion.
Like its competitors, Deere (NYSE:DE) & Co. and Caterpillar Inc (NYSE:CAT)., CNH's profit margins had been propped up by double-digit price increases across its machinery segments to help offset inflated input costs and a choppy supply chain. However, inflationary pressures are starting to depress order activity for cyclical industrial companies, analysts said.
CNH, which houses brands such as Case IH and New Holland, reported third-quarter net sales from industrial activities down 1% year on year at $5.33 billion.
South American tractor demand was down 16% and combine demand fell 47% in the three months to Sept. 30.
The group is positioned to maintain its full-year adjusted earnings per share target of about $1.70, Chief Executive Scott Wine said in a statement.
CNH, which also announced a
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