CNH Industrial revenues were down 15 percent in the first quarter, compared to the same period in 2019, to $5.5 billion. Industrial sales, which includes Case Construction Equipment, totaled $5 billion for the quarter, down 17 percent from 2019. The company cited Covid-19 responses as well as previously announced moved to reduce dealer inventory.
The company announced a delay in the spinoff of its on-highway businesses because of the market conditions. CNH also pulled guidance for the second quarter and full year.
Revenue in the construction side of the business fell 34 percent for the quarter to $422 million. Net pricing was impacted by retail program enhancements in response to Covid-19 impacted market conditions. Product cost was increased by negative fixed cost absorption due to plant shutdowns, and costs associated with continued quality improvement initiatives.
CNH Covid-19 update
In its press release, CNH provided an update on how Covid-19 is affecting it.
“In the first quarter of 2020, demand in all sub-segments of construction end-markets were showing double-digit declines in all geographies, with the exception of South America....
“The European truck market was down 19 percent year-over-year in the first quarter, with light duty trucks down 14 percent, and medium and heavy trucks down 27 percent, with industry sales of light duty trucks and medium and heavy trucks declining 34 and 38 percent, respectively, in the month of March alone.
“At this point in time it is not possible to forecast future short and longer term demand in our key markets.
“During the quarter, the Company continued to ensure that most parts depots, service facilities and dealerships remained operational. All the safety, containment and prevention measures mandated by law and agreed with the workforce enabled end use customers to continue to safely operate their fleets of agricultural and construction machinery and commercial vehicles. “On April 27, the Company began to restart some of its industrial facilities in Europe within the constraints of applicable emergency regulations. As of May 5, more than two-thirds of the Company’s 67 plants are already operational, to varying degrees. On a regional basis, more than 75 percent of production sites in Europe and some 60 percent in North America, in South America, and in the Rest of the World are already operational. The Company plans to return to full operation at most sites by the end of May.”
Source: CNH Industrial
