Research, Charts & Company Announcements
Research Tree provides access to ongoing research coverage, media content and regulatory news on CNH INDUSTRIAL NV. We currently have 14 research reports from 1 professional analysts.
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CNH INDUSTRIAL NV
CNH INDUSTRIAL NV
Mixed picture from J Deere for Q1 16/17
18 Feb 17
The group’s revenue increased by 2% to $5.63bn in the quarter through to 29 January while net earnings fell by 24% to $194m. Agricultural and turf revenue was unchanged at $3.6bn, whereas it fell in the construction and forestry division by 6% to $1.1bn. Positive consolidated growth exclusively stemmed from a rise in financial services (+9% to $696m) and ‘other’ (+93% to $231m). The group’s operating earnings were up by 2% to $416m, but this number excludes certain head office costs. Agricultural and turf achieved a 48% profit increase to $213m, while it fell in both construction and forestry (-51% to $34m) and financial services (-13% to $169m). Management blames continuously soft conditions in farming and construction for the profit setback, in particular in the USA and Canada.
All numbers headed south in Q4 16
31 Jan 17
CNHI’s preliminary Q4 US-GAAP accounts showed falling revenue (-2.0% to $7.0bn), EBIT (-50% to $162m), and net profit numbers (-59% to $95m). As a result, the full-year numbers also showed a negative trend (sales: -4% to $24.9bn, EBIT: loss of $9m vs. profit of $567m, net loss of $252m vs. profit of $253m). We are using the group’s IFRS accounts and these are no better. Full-year revenue was down by 4% to $25.3bn, EBIT by 55% to $638m, and net earnings turned around from a profit of $236m in 2015 to a loss of $373m. As a consequence, management will propose a dividend of €0.11 compared to €0.147 paid for 2015. All these numbers are clearly short of what we had anticipated.
John Deere continues to suffer
23 Nov 16
The Financing division reported net earnings of $82m (-33%) for the last quarter and $342m (-31%) for the October 2016 fiscal year. Management blames less-favourable financing spreads, higher losses on residual values and higher provisions for credit losses for the poor divisional results. The consolidated group suffered a 19% net profit fall to $285m in Q4 and 21% to $1.52bn in the full-year. Net sales of the industrial activities continued falling in Q4 (-4.8% to $5.65bn) and in the full-year (-9.3% to $23.4bn). Management sees revenue for agricultural machinery to be about flat in the current fiscal year. While it is likely to fall in the USA, Canada, and Europe, it is expected to be flat to slightly up in Asia and up by about 15% in LatAm. US and Canadian turf and utility equipment turnover is expected to be unchanged. Finally, it expects currency movements to have a marginally positive impact. We wonder how this might happen in view of the recent dollar strength. In addition, the outlook for LatAm seems extremely optimistic.
Q3 16 was again a disappointment
31 Oct 16
The group’s revenue (we use the company’s IFRS accounts as only these allow us to compare the numbers with our universe) fell by a good 2% to $5.84bn in the last quarter while EBIT was also down by slightly more than 2% to $216m. We had expected $5.92bn and $270m. CNHI showed a 5% revenue fall to $18.2bn for the 9M and a 70% EBIT fall to $275m. However, management had to charge a total of $551m to provisions in H1 16 as a result of the EU investigation into illegal truck price fixing. EBIT, however, was also down when we exclude restructuring costs and other unusual items (-15% to $228m in Q3 and -13% to $866m through to September).
$75m disposal gain limited John Deere’s Q3 and 9M profit setback
19 Aug 16
The revenue decline of both the Agricultural and Construction Equipment divisions accelerated in Q3. The former division saw its turnover falling by 11% to $4.70bn in the last quarter (through to July) and by 7% to just above $14bn in the 9M. The respective numbers for Construction Equipment were -24% to $1.16bn and -21% to $3.7bn. In spite of this, Agricultural Equipment achieved a 21% EBIT gain to $571m in the last quarter but the operating result was down by 4% to $1.33bn in the 9M. However, these numbers include the above disposal gain from the listing of SiteOne Landscapes, in which Deere continues to own a 24% stake. Agricultural Equipment saw its EBIT falling by 58% to $54m in Q3 and by 58% to $197m in 9M. Finally, Financial Services suffered an operating profit setback of 20% to $191m in Q3 and of 26% to $545m in 9M. Management blames the lack of volume and negative currency impacts for the revenue and profit falls of the two manufacturing divisions. In addition, it blames less-favourable financing spreads, a higher provision for credit losses, and higher losses on lease residual values for the profit decline of Financial Services.
Some profit stabilisation in Q2 16
26 Jul 16
Revenue fell by another 2.5% to just below $6.9bn in Q2 which brought the H1 number to $12.4bn, a decrease of 5.8%. This is only marginally below our projected $12.6bn. The group’s Q2 trading profit was almost unchanged at $454m but EBIT fell by another 7% to $394m. Finally, net profit fell by 33% to $119m which translated into a H1 loss of $410m compared to a profit of $206m in H1 15. Whereas the trading profit is marginally higher than our projected $441m, net earnings are clearly short of our calculated $156m.
20 Feb 17
Hayward Tyler Group* (HAYT): Trading update and financial position (CORP) | Petra Diamonds (PDL): Interim results (BUY) | Gemfields* (GEM): Interim results (CORP) | Premaitha Health* (NIPT): Middle East momentum (CORP) | Sound Energy (SOU): Acquisition update and TE-8 well spud (HOLD) | Proactis* (PHD): Interim trading on track (CORP) | 7digital* (7DIG): Automotive contract win (CORP)
The Slide Rule
12 Jan 17
What is The Slide Rule? The Slide Rule has been designed to dramatically simplify the identification of the best companies in the UK small/mid-cap sector by making a quantitative assessment of the relative potential of each company. At its core, The Slide Rule aims to identify those companies that create genuine shareholder value through strong returns on capital and solid growth, but also present a value opportunity with the potential tailwind of earnings momentum. Companies are assessed within a Quality, Value, Growth and Momentum (QVGM) framework.
N+1 Singer - Small-cap quantitative research - New quality style screen + 11 quality focus stocks
09 Feb 17
We introduce our fourth and final style screen representing “quality”. This screens for stocks with the best combination of high returns on capital/equity, EBIT margins and operating cash-flow conversion rates. These criteria should help us monitor how strong underlying returns translate into share price performance over time and under varying market conditions. The screen selects the “best” 25 stocks from our universe of just over 500 stocks and, as usual, we focus on a shorter list of stocks we cover or otherwise know and believe to be particularly interesting. We provide brief investment summaries on these focus stocks on pages 4 – 9. We will monitor performance and refresh the screen in approximately 3-4 months time.
Emerging from the clouds
16 Feb 17
Rolls-Royce’s underlying performance in FY16 was ahead of both its own and market expectations. Media focus on the non-cash £4.4bn headline FX loss is missing what looks to be the basis for optimism. As the civil model starts to move from investment in engines for the A350 and A330neo into the aftermarket delivery phase over the remainder of the decade, we think cash flow is likely to improve, particularly if supported by an eventual recovery in Marine.
15 Feb 17
At the current market capitalisation of £29m, we believe the shares are significantly undervalued. We estimate that the highly profitable Maritime business is alone worth at least £40m. With net cash of £9m at end-2016, this implies that the market is currently ascribing a combined negative value of £17m to the rest of the group, which together account for c.54% of group revenues. This is very harsh given the management actions to transform TP Group to a profit-driven Tier 2 specialist services and engineering company are bearing fruits across the divisions. TPG Managed Solutions is expected to more than double its profits in 2017, while TPG Engineering and Design & Technology are on course to deliver sustainable profits from 2019. Even if we ascribe zero value to Engineering, Design & Technology and Managed Solutions, the shares are worth 9.5p a share, a 38% upside from the current share price. BUY.
Small Cap Breakfast
16 Feb 17
Saffron Energy—Schedule One update. Raising £2.5m, expected Mkt Cap £7.7m. Admission due 24 Feb. Italian Oil & Gas Play Guinness Oil & Gas Exploration—Publication of prospectus. Seeking to raise £50m and invest in 15 exploration companies at launch, with plans to grow the portfolio to 30 positions during its lifetime. Issue closing 23 Feb. Arix Bioscience — Intention to float on the main market from the global healthcare and life science Company supporting medical innovation. Raised £52m in Feb 16 with investors including Woodford Investment Management