CNH Global NV
) reported a net income (excluding restructuring and exceptional
items) of $230 million or 92 cents in fourth quarter of 2012
compared with $189 million or 79 cents in the year-ago quarter.
The quarterly results outpaced the Zacks Consensus Estimate of 71
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For full year 2012, net income stood at $1,179 million or $4.83
per share versus $918 million or $3.82 per share in the year-ago
The rise in net income was led by the company's impressive
performance in the agricultural and industrial businesses,
neutralizing the negative effects of currency translation and
high research and development expenses during the quarter.
Net sales in fourth quarter 2012 totaled $4,929 million versus
$4,768 million in the year-ago quarter. The reported revenues
beat the Zacks Consensus Estimate of $4,535 million. For full
year 2012, net sales increased 8% year over year to $19.4
billion. The rise in sales was driven by robust demand for
agricultural equipments, which offset the negative effects of the
struggling construction equipment segment and foreign currency
Segment-wise, Agricultural Equipment sales amounted to $4.0
billion in the fourth quarter versus $3.7 billion in the year-ago
quarter. The increased sales were on the back of the company's
impressive pricing structure, positive product mix and higher
CNH worldwide production of agricultural equipment trailed the
fourth quarter sales, resulting in strong cash flow as the Group
implemented scheduled slowdown in production to reduce dealer
inventory to year-end desired levels.
Construction Equipment sales came in at $915 million versus
$1,073 million in the year-ago quarter. The reduction in sales
was due to demand slowdown in geographic regions other than North
America and Europe.
CNH's worldwide production of construction equipment was 21%
below the quarterly retail sales as the Group continued to
balance inventory levels and was in line with the expected demand
levels in 2013.
Financial Services net income stood at $79 million in fourth
quarter versus $66 million in the year-ago quarter.
Agriculture Equipment's gross margin in the fourth quarter was
20.0% versus 18.5% in the year-ago quarter. Gross margin for the
Construction Equipment segment decreased to 11.1% from 12.3% in
the year-ago quarter
Balance Sheet and Cash Flows
As of Dec, 2012, cash and cash equivalents came in at $2,008
million versus $2,055 million in the year-ago quarter. Long-term
debt was $14.3 billion at year-end 2012 versus $13.0 billion in
the year-ago period.
As of Dec 2012, net cash provided by operating activities was
$1,185 million versus $994 million generated a year ago
CNH paid a special dividend of $10 per share on Dec 28, 2012 in
connection to the combination transaction between CNH Global N.V.
and Fiat Industrial S.p.A.
Management provided inital guidance for full year 2013.
Industry's Agricultural and Construction Equipment unit volumes
are expected to be flat to up 5% while the company's revenues are
expected to grow more than 5% with operating margins in the range
of 8.5 % - 9.0% in 2013.
CNH Global operates in an intensely competitive landscape that
includes big players like
Deere & Company
CNH Global currently has a Zacks Rank #3 (Hold). One of its
) carries a Zacks Rank #2 (Buy).