CNH Industrial Capital portfolio falls 2.4% in Q1

CNH Industrial Capital’s originations fell in the first quarter as penetration rates improved despite lower agricultural and construction equipment sales at parent company CNH Industrial. 

STATE OF PLAY: CNH’s financial services performance declined in Q1, with the management portfolio ending the quarter at $28 billion, down 2.4% year over year but up 1.1% YoY on a constant currency basis, as slightly higher penetration rates failed to overcome lower equipment sales, Chief Financial Officer Oddone Incisa said during today’s Q1 earnings call. 

“It is worth noting that within the total portfolio balance, the wholesale portfolio, which represents new receivables, is down $1.5 billion of constant currencies since March 2024,” he said. “The dealers have reduced their inventory, adapting to the changed market conditions.” 

BY THE NUMBERS: According to CNH’s earnings release, the captive also reported in Q1: 

• Originations dropped 4.4% to $2.4 billion; 

• Net income totaled $90 million, down 23.7% YoY; 

• Revenue fell 5% YoY to $651 million; 

• Delinquencies more than 30 days past due rose 40 basis points (bps) quarter over quarter and rose 60 bps YoY to 2.3%; and 

• Its portfolio mix was 64% retail, 31% wholesale and 5% operating lease, compared with 65%, 35% and 5%, respectively, in Q1 2024. 

Performance slump

While CNH Industrial’s financial services operations declined during the first quarter, performance showed strength relative to the overall equipment industry market conditions, CNH Industrial CEO Gerrit Marx said during the call. 

“We are proud of the performance of our financial services segment that yielded sound results while facing the market slowdown and higher risk provisioning needs,” he said. “This is an important strategic part of our business that provides our farmers and builders with access to competitive financing even when the macro environment becomes more uncertain and less stable.” 

CNH Industrial reported the following in Q1 sales figures: 

• Global industrial sales dropped 23.2% YoY to $3.2 billion; 

• Global agriculture sales dropped 23.5% YoY to $2.6 billion; and 

• Global construction sales dropped 22% YoY to $591 million. 

CNH Industrial continues to work with dealers to navigate tariff costs and economic uncertainty during the farm machinery slump, Marx said. 

“We act on both sides effective today and in alignment with our dealers, we implemented a modest price adjustment in North America for new orders while sharing the tariff cost impact with our supply base,” he said. “We have been and always will be committed to the North American home of our global brands, and we see multiple ways to address the possible change of global trade, not only of commodities, but also of agriculture and construction equipment.” 

MARKET REACTION: Shares of CNH Industrial (NYSE: CNH) were up 7.26% or 84 cents from market open to $12.41 as of market close today. It has a market capitalization of $14.44 billion. 

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