CNH Industrial Capital’s revenue jumped in 2024 despite decreased originations in the fourth quarter and lower agricultural and construction equipment sales across the board by parent company CNH Industrial.
STATE OF PLAY: The sales decline was partly due to cutting production hours by 34% as the manufacturer worked to help bring down dealer inventory levels, Chief Executive Gerrit Marx said during today’s Q4 earnings call.
“The lower production, focused sales campaigns and some improvements in marketshare helped dealers reduce their inventory by over $700 million in the quarter,” Marx said. “There is still work to do on that front. As we said before, we remain price disciplined and will continue to underproduce to the retail demand at least through the first half of 2025.”
BY THE NUMBERS: CNH Industrial Capital’s revenue totaled $2.8 billion in 2024, up 7.8% year over year, according to its Q4 earnings release. Net income rose 2.2% YoY in 2024 to $379 million, primarily driven by “favorable volumes worldwide” and interest margin improvements in most regions, Chief Financial Officer Oddone Incisa said during the call.
In Q4, the OEM captive reported:
- Originations dropped 5.7% YoY to $3.2 billion;
- Net income totaled $92 million, down 18.6% YoY;
- Managed portfolio shrunk 3.8% YoY to $27.8 billion;
- Revenue fell 3.3% YoY to $743 million;
- Delinquencies more than 30 days past due fell 30 basis points (bp) quarter over quarter, but rose 50 bp YoY to 1.9%; and
- Its portfolio mix was 68% retail and 32% wholesale, compared with 67% and 33% respectively, in Q3.
Higher interest margins from favorable volumes were offset by “high-risk costs in North and South America and lower recoveries on used-equipment sales,” contributing to decreased profit in Q4, Incisa said during the call.
Meanwhile, CNH Industrial reported the following full-year sales figures:
- Global industrial sales declined 22.8% YoY to $17.2 billion;
- Global agriculture sales fell 22.8% YoY to $14 billion; and
- Global construction sales fell 22.4% YoY to $3.1 billion.
FUTURE LOOK: CNH Industrial expects sales to drop again in 2025 as it continues to minimize production and prioritize reducing dealer inventories, according to the release. The company projects agriculture sales to drop 13% to 18% and construction sales to fall 5% to 10% in 2025.
MARKET REACTION: Shares of CNH Industrial (NYSE: CNH) were up 1.5% from market open to $12.73 as of market close today. It has a market capitalization of $15.9 billion.
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