CNH Industrial Capital originations fall 7.6%
Delinquencies rose to 4.4% in Q2
CNH Industrial Capital’s originations, revenue and net income declined in the second quarter as delinquencies rose amid credit pressure in South America.
The year-over-year increase in delinquencies occurred due to “persistent economic difficulties in South America,” Chief Financial Officer Jim Nickolas said during today’s Q2 CNH earnings call.
Financial services net income was affected by margin compression outside North America, lower volumes in North and South America, higher risk costs in Brazil and increased labor costs, according to CNH’s earnings release today.
Lower volumes also pressured revenue, fewer used-equipment sales related to operating lease maturities and lower yields in every region except South America.
Nickolas expects financial services net income to improve YoY in Q3 against a lower prior-year comparison, though CNH will continue monitoring market conditions, he said.
By the numbers
CNH reported these Q2 results for its financial services segment, according to the release:
- Revenue declined 4.2% year over year to $656 million;
- Retail loan originations fell 7.6% YoY to $2.5 billion;
- Net income dropped 18.4% YoY to $71 million;
- Its managed portfolio decreased 2.4% YoY to $28 billion, including 70% retail and 30% wholesale financing;
- Thirty-plus-day delinquencies rose 0.5 percentage points YoY to 4.4%; and
- Equity increased $16 million YoY to $2.9 billion.
MARKET REACTION: Shares of CNH Industrial [NYSE: CNH] were up 5.4% from market open to $10.80 as of market close today. It has a market capitalization of $13.3 billion.
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