Though the company continues to see sales declines in its agricultural equipment segment, CNH Industrial was able to report increased profit for the third quarter thanks to cost reductions and improved demand in certain markets.
The company, which manufactures the Case and New Holland brands of heavy equipment, reported a 1.7-percent sales decline in the 3Q to $5.7 billion. Profit rose 167 percent to $39 billion. (In 3Q 2015, the company reported a loss of $128 million.)
“Our third quarter results were consistent with our expectations,” said Richard Tobin, chief executive officer of CNH Industrial. “Despite the challenging demand environment in our agricultural equipment business we have been able to increase our comparable profit margin for the quarter in the segment as a result of proactive cost control measures, and improved equipment demand in Latin America. Our commercial vehicles business continues to gain market share in Europe as our new vehicle product launches continue to gain traction in the market.”
CNHI agricultural equipment sales fell 3 percent to $2.35 billion during the 3Q, but profit for the segment rose 6.6 percent to $155 million. The company attributes the sales dip to unfavorable product mix in North America and unfavorable industry volume in the small grain sector in Europe and the Middle East.
Nearly offsetting those difficulties however were increased ag sales in Latin America thanks to improved demand in Brazil and Argentina.
Construction equipment sales increased 0.7 percent for the quarter to $595 million. However, profit fell 97 percent to $1 million from the 3Q 2015 figure.
Commercial vehicles sales fell 3.4 percent to $2.1 billion for the quarter with profit up 6 percent to $64 million. Finally, Powertrain sales increased 6.3 percent with profit up 49 percent to $52 million.
Looking forward to the rest of 2016, the company’s outlook remains unchanged. CNH expects net sales of its Industrial Activities businesses to end the year between $23 billion and $24 billion, which would be an 11-percent drop from 2015.