Industrial goods manufacturer
CNH Global NV
) reported a net income (excluding restructuring and exceptional
items) of $326 million or $1.33 per share in first quarter 2013
compared with $269 million or $1.11 per share in the year-ago
quarter. The healthy year-over increase in earnings was
attributable to continued strength in the agricultural sector
market, robust industrial performance and improved results by the
financial services business. The reported earnings were well
ahead of the Zacks Consensus Estimate of 94 cents.
Net sales in first quarter 2013 aggregated $4,697 million versus
$4,639 million in the year-ago quarter, representing a
year-over-year increase of 1% or 3% on a constant currency basis.
The rise in sales was buoyed by robust demand for agricultural
equipments, which offset the negative effects of lower volume in
the construction segment, higher selling, general and
administrative expenditures, and higher research and development
Agricultural equipment net sales accounted for 84% of total
equipment sales, while construction equipment accounted for the
balance 16%. On a geographical basis, North America generated 44%
of total net sales in the quarter, followed by Europe, Africa,
the Middle East and CIS (EAME & CIS, 30%), Latin America
(19%), and Asia Pacific (APAC, 7%).
Agricultural equipment sales totaled $3,943 million in the
reported quarter versus $3,615 million in the year-ago quarter.
The increased sales were on the back of the company's impressive
pricing structure, positive product mix and higher volume. All
the geographic regions, barring APAC, reported year-over-year
increase in net sales in the segment.
By product categories, worldwide performance was in line with the
market in tractors, while sale of combines was up globally. The
company's global production of agricultural equipment was 19%
above retail sales in the reported quarter, as it augmented
inventory levels to accommodate the spring and summer selling
seasons and the launch of the new combine in North America.
Construction equipment sales came in at $754 million versus
$1,024 million in the year-ago quarter, representing a
year-over-year decline of 26%. The reduction in sales was due to
a demand slowdown in all geographic regions. Capacity utilization
of the segment was reduced during the quarter in order to match
inventory levels with lesser demand.
Financial Services' net income stood at $90 million in the
reported quarter versus $73 million in the year-ago quarter due
to a higher average portfolio and a lower provision for credit
At quarter-end, cash and cash equivalents stood at $1,482 million
with long-term debt of $14.8 billion.
For full year 2013, CNH Global expects Agricultural unit volume
to be flat to down 5% and Construction equipment to be down 5% to
10%, while the company's revenues are expected to grow by 5% with
operating margins in the range of 8.5 % - 9.0%.
CNH Global currently has a Zacks Rank #1 (Strong Buy). Other
players in the industry worth mentioning include
Alamo Group, Inc.
AO Smith Corp.
), each carrying a Zacks Rank #2 (Buy).
ALAMO GROUP INC (ALG): Free Stock Analysis
SMITH (AO) CORP (AOS): Free Stock Analysis
CNH GLOBAL NV (CNH): Free Stock Analysis
KOMATSU LTD ADR (KMTUY): Get Free Report
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