By Abhinav Parmar
(Reuters) -CNH Industrial on Tuesday forecast full-year profit below Wall Street’s estimates, and said it expects weak demand for farm equipments to bottom out by the year-end, before picking up in 2026.
The Basildon, UK-based company expects sales to be lower year-over-year in both its agriculture and construction equipment markets in 2025.
Farm equipment demand remains subdued due to falling farm incomes globally, forcing farmers to rethink their big-ticket purchases, leading to higher dealership inventories and moderation in restocking efforts.
The company said it continues producing fewer units than the retail demand to reduce elevated inventory levels at its dealers but added that inventories remain high.
“Agriculture dealer inventory went down in Q4 by over $700 million due to focused retail sales support and 34% fewer production hours,” CNH CEO Gerrit Marx said.
The company had an excess dealer inventory of about $1 billion to $1.5 billion in the third quarter.
CNH expects the industry to start bottoming in 2025, adding that it expects retail demand in North America to increase gradually in 2026, Marx said on a post-earnings analyst conference call.
Shares of CNH pared premarket losses to be up about 1.7% in afternoon trade.
The company expects pricing to be flat to slightly down in the first half of 2025 and expects lower margins in the first two quarters of the year as well.
“The pricing actions taken to refresh dealer inventory while also continuing to manage production- both of these factors have a direct impact on margins. We would anticipate that once the channel inventories are more aligned with demand, we see support for margins to begin to recover,” said Kristen Owen, senior analyst at Oppenheimer.
It expects 2025 adjusted earnings to be in the range of 65 cents to 75 cents per share, below analysts’ estimates of 85 cents per share, according to data compiled by LSEG.
The New Holland tractor maker reported fourth-quarter adjusted profit of 15 cents per share, missing estimates of 18 cents per share.
(Reporting by Abhinav Parmar in Bengaluru; Editing by Vijay Kishore and Tasim Zahid)
