Higher forecasts for profit and cash flow
CNH's November 9 results release put its 2026 adjusted diluted earnings forecast at $0.44 to $0.48 per share, compared with the previous range of $0.41 to $0.46. It also raised its forecast for free cash flow from Industrial Activities to $300 million to $450 million, from $200 million to $400 million.
The updated outlook calls for Agriculture net sales to be about flat year over year. CNH narrowed that segment's expected adjusted EBIT margin to 5.1%-5.4%, from 5.0%-5.5%. For Construction, it now expects sales growth of 8%-10%, compared with its earlier forecast of 5%-10%.
Adjusted profit rises despite tax-related charge
Figures available as the call opened showed quarterly earnings of $0.16 per share versus an estimate of $0.10, a positive surprise of 67.06%. Revenue totaled $4.35 billion against an estimate of $4.52 billion, a negative surprise of 3.62%. Executives were scheduled to discuss the results before taking questions from Wall Street analysts.
Reported net income fell 48% to $35 million from $67 million a year earlier. The decline reflected a $156 million non-cash charge for a valuation allowance against deferred tax assets in the Brazilian Financial Services business.
Excluding that charge, adjusted net income increased 88%, reaching $205 million compared with $109 million in the third quarter of 2025.
Equipment margins improve
Agriculture generated $2.907 billion in net sales, a 2% decline, while adjusted EBIT increased 26% to $173 million from $137 million a year earlier. Its adjusted EBIT margin reached 6.0%, an improvement of 140 basis points.
Construction sales rose 5% to $777 million. The segment earned $65 million in adjusted EBIT, compared with $14 million in the prior-year quarter, and its adjusted EBIT margin increased to 8.4% from 1.9%.
The quarterly results included $109 million in pre-tax IEEPA tariff refunds. CNH said it plans to reinvest nearly all of those refunds; after reinvestment, it expects their full-year net benefit to total just $5 million in Agriculture and $30 million in Construction.
Industry demand and farmer finances remain under pressure
CNH reported lower third-quarter industry demand across most regions. North American tractor sales volumes fell 12% year over year for machines under 140 horsepower and 5% for those over 140 horsepower. Combine volumes declined 13%.
South American demand dropped 22% for tractors and 19% for combines. In Europe, the Middle East and Africa, the declines were 4% and 3%, respectively. Asia Pacific tractor demand fell 4%, while combine demand increased 76%.
Financial Services posted a $77 million net loss, compared with net income of $47 million a year earlier. CNH attributed the change mainly to the Brazilian deferred-tax valuation allowance and unfavorable currency translation.
As of September 30, 2026, 4.1% of receivables were more than 30 days past due, up from 3.5% a year earlier. The company linked the increase to economic pressure on farmers, particularly in South America.
Kobelco agreement would reshape Construction ownership
Under the announced agreement, CNH's Construction Equipment business would become a joint venture in which Kobelco Construction Machinery Co., Ltd. holds majority ownership. Kobelco is a wholly owned subsidiary of Kobe Steel, Ltd.
CNH CEO Gerrit Marx said the transaction positions the company as the largest pure-play agricultural machinery original equipment manufacturer.
