CNH Industrial 2025 Q3 Earnings Sharp Net Income Drop Amid Market Challenges

CNH Industrial reported Q3 2025 results that significantly missed expectations, with revenue and profits declining amid weak demand and ongoing inventory adjustments. The company revised its full-year guidance downward, reflecting persistent market headwinds and incremental tariff impacts.

Revenue

CNH Industrial’s total revenue declined by 5.5% to $4.40 billion in Q3 2025, compared to $4.65 billion in the same period last year. The Agriculture segment saw a 7% drop in net sales to $3.7 billion, driven by reduced industry demand and channel destocking. Construction segment performance varied regionally: North America reported a 11.7% year-over-year increase in sales to $400 million, while South America declined by 11.9% to $513 million. Europe, Middle East, and Africa (EMEA) saw a 16% rise in Agriculture sales to $1.05 billion, partially offset by a 28.7% decline in North American Agriculture sales to $1 billion.

Earnings/Net Income

CNH’s net income plummeted to $67 million in Q3 2025, a 78.4% decrease from $310 million in Q3 2024. Earnings per share (EPS) fell to $0.06, down 75% year-over-year, underscoring the company’s struggle with profitability amid volatile market conditions. The sharp decline in both metrics highlights the challenges posed by reduced demand and higher tariffs.

Post-Earnings Price Action Review

The strategy of buying CNH Industrial shares after a quarterly revenue raise and holding for 30 days showed poor performance over the past three years. The annualized return was -12.5%, significantly underperforming the market average. This indicates that relying on quarterly earnings reports for investment decisions may not be effective due to market reactions and broader market trends.

CEO Commentary

Gerrit Marx, CEO of CNH Industrial, acknowledged persistent market challenges but emphasized disciplined production, channel inventory reduction, and operational excellence as key strategies to navigate headwinds. He highlighted investments in technology and innovation, citing recent product launches and industry recognition, while expressing confidence in positioning CNH for renewed growth as conditions improve. The tone reflects cautious optimism, balancing short-term challenges with long-term strategic commitments.

Guidance

CNH updated its 2025 outlook, projecting Agriculture segment net sales to decline 11-13% year-over-year, with adjusted EBIT margin of 5.7-6.2%. The Construction segment expects net sales down 3-5%, with an adjusted EBIT margin of 1.7-2.2%. Free cash flow for Industrial Activities is estimated at $200-500 million, while adjusted diluted EPS is projected at $0.44-$0.50. Guidance factors in incremental tariff impacts, geographic mix challenges, and ongoing cost management efforts.

Additional News

Recent developments highlight CNH’s strategic focus on cost control and innovation amid market volatility. The company announced plans to reduce channel inventories by $200 million sequentially, aiming to reach targeted levels within 3-4 months. Management emphasized investments in Agentic AI for FieldOps and quality improvements, which have already reduced quality costs by $60 million year-to-date. Additionally, CNH outlined its 2030 mid-cycle margin commitment, signaling long-term operational confidence despite current headwinds.

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