CNH Industrial profit rises on higher prices, forecasts sales decline in 2024
By Bianca Flowers and Aatreyee Dasgupta
(Reuters) -CNH Industrial reported a higher fourth-quarter profit on Wednesday, boosted by strong prices for its farm and construction machinery despite slowing demand.
Shares for the Italian-American company were up 3.6% in premarket trading on the NYSE.
Price increases across the manufacturer's machinery segments helped augment margins in spite of revenue shortfall for agriculture and construction equipment. CNH executives have said demand for high-horsepower tractors is a sign that farmers haven't pulled back entirely on spending despite volatility in crop commodities and a lower forecast for farmer income for 2024.
The company reported 42 cents earnings per share, in line with analysts' expectations, but also forecast a decline in revenue across its equipment divisions. Net sales for farm equipment are expected to be down between 8% and 12%, while construction sales are predicted to be in the range of 7% to 11%.
CNH forecast free cash flow of industrial activities to be between $1.2 billion and $1.4 billion, compared with $1.3 billion and $1.5 billion last year.
The combine harvester maker, which has declared its aim of feeding a growing world population, has focused on autonomous agriculture machinery. This has led to investments in a suite of precision technology products, such as a driverless tillage and seed-by-seed planting to deliver higher yields and help farmers cut costs.
CNH, faced with slowing demand in Brazil, has also rolled out a restructuring plan entailing a 5% reduction of its salaried workforce and a revision of its cost structure, aimed at lowering 10% to 15% of its operational expenses collectively.
Agriculture sales, which account for the bulk of CNH's
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