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What were the key takeaways from CNH Industrial’s earnings call?

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What factors drove the changes in CNH Industrial's revenue and profit?

- **Revenue decline**: Q3 2025 revenue down 5% to $4.4B, driven by North America weakness (-29% ag sales) and tariffs.
- **Tariff headwinds**: $250M/yr ag and $125M/yr construction gross cost impacts, partially offset by price increases.
- **Inventory progress**: Dealer new equipment inventory down $200M+ Q3, on track for $1B+ reduction by year-end.
- **Quality focus**: $60M+ annualized savings in quality costs, with dealer-delivered tractor quality at 10+yr high.
- **2026 outlook**: Flat to slightly down global demand, with production increases to align with retail.

**【CEO Summary Section】**
- Q3 2025 revenue declined 5% to $4.4 billion, driven by a 11% drop in Global Ag sales (-29% in North America, +16% in EMEA) and 7% decline in Industrial net sales.
- Tariffs added $100M (ag) and $40M (construction) costs in 2025, with Q4 impacts of $60M (ag) and $20M (construction).
- Focused on reducing dealer inventory by $200M+ Q3, targeting $1B+ reduction by year-end.
- Emphasized quality improvements (e.g., $60M+ annualized savings in quality costs) and new product launches in EMEA.
- 2030 margin targets remain intact, with plans to offset tariffs through pricing and cost mitigation.

**【CFO Financial Commentary】**
- Industrial adjusted EBIT: $104M (-69% YoY), driven by lower demand, tariffs, and geographic mix.
- Ag segment: Q3 net sales $3B (-10% YoY), with 3% price increases partially offset by South American competition.
- Construction: Q3 net sales $739M (+8% YoY), but gross margin down 210bps to 14.5% due to tariffs.
- Free cash flow outflow of $188M, stable vs. Q3 2024, with progress on working capital.
- Financial Services net income $47M (-31% YoY) due to Brazil credit risk costs.

**【Q&A Key Highlights】**
- **Tariff Impact**: 2025 gross cost run rate of $250M (ag) and $125M (construction), with plans to offset through pricing and sourcing.
- **Inventory Progress**: North America dealers on track to meet new equipment inventory targets in 3-4 months; used inventory down 3Q in a row.
- **2026 Outlook**: Flat to slightly down global industry retail demand, with production aligned to retail (mid-single-digit production growth).
- **EMEA Focus**: New tractor launches in EMEA to improve margins, with Q3 EMEA tractor sales up 16%.
- **Construction Optimization**: Closing Burlington, IA plant to consolidate production in higher-utilization facilities.


CNH Industrial N.V. (CNH) Q3 2025 Earnings Call Transcript

Revenue

Sales and Services Revenue

Financing Services Revenue

Other Revenue

Cost of Revenue

Cost of Goods and Services

Cost of Financing Services

Other Cost

Gross Profit

Other Operating Income

Operating Expenses

Selling, General and Administrative Expenses

Selling and Marketing Expenses

General and Administrative Expenses

Research and Development Expenses

Loss on Bad Debts

Loss on Impairment of Other Assets

Loss on Disposal of Assets

Other Operating Expenses

Operating Income

Non-Operating Income (Loss)

Income (Loss) from Affiliates

Income (Loss) from Associates

Income (Loss) from Joint ventures

Gain (Loss) on Other Investment

Gain (Loss) on Change in Fair Value

Gain (Loss) on Foreign Currency Exchange

Other Non-Operating Income (Loss)

Net Interest Expense

Interest Expense

Interest Income

Pretax Income From Continuing Operations

Income Tax Expense

Current Income Tax

Deferred Income Tax

Income Tax Adjustments

Net Income from Continuing Operations

Income from Discontinued Operations

Other Items Before Net Income

Net Income

Net Income Attributable to Minority Interests

Net Income Attributable to Owners of the Company

Preferred Stock Dividends

Other Adjustments

Net Income Attributable to Common Stockholders

Other Comprehensive Income

Total Comprehensive Income

Total Comprehensive Income Attributable to Minority Interests

Total Comprehensive Income Attributable to Owners of the Company

Basic EPS

Basic EPS from Continuing Operations

Basic EPS from Discontinued Operations

Diluted EPS

Diluted EPS from Continuing Operations

Diluted EPS from Discontinued Operations

CNH

CNH fundamentals

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