CNH Global N.V. (CNH) posted a net income before restructuring and exceptional items of $320 million or $1.33 per share in the second quarter of 2011, which soared from a net income of $140 million or 59 cents in the year-earlier quarter. The earnings results were ahead of the Zacks Consensus Estimate of 99 cents per share.
Net sales of Equipment, excluding revenue from Financial Services were $4.88 billion, up 24% from the year-earlier quarter, driven by a double-digit growth across Agricultural Equipment and Construction Equipment.
On a segmental basis, revenues from Agricultural Equipment were $3.9 billion, up 22% from the year-earlier quarter, led by favorable trading conditions across all regions.
Revenues from Construction Equipment were $1030 million, up 30% from the year-earlier quarter, led by improvements in market conditions in all regions, especially the North American markets.
Net Income attributable to Financial Services was $52 million, up 58% from the year-earlier quarter.
Equipment operating margin improved to 10.7% from 8.4% in the year-earlier quarter, attributed to higher revenues, increased industrial utilization and improved product pricing. Agricultural Equipment reported an operating margin of 12.9% compared with 10.1% in the year-earlier quarter. Construction Equipment reported an operating margin of 2.4% compared with 1.6% in the year-earlier quarter.
During the second quarter of 2011, Equipment Operations provided $472 million for operating activities and $72 million for capital expenditure.
Guidance
For fiscal 2011, management expects strong demand in the agricultural and construction equipment markets, driven by a favorable environment for agricultural commodity prices and an improvement in the Construction Equipment.
Based on the company’s performance, management upgraded its fiscal 2011 revenue guidance to 15%-20%, up from the previous expectation of 10% growth. The company also expects operating margin at the upper end of its previous guidance of 7.1% to 7.9%.
Incorporated in the Netherlands, CNH, a manufacturer of agricultural and construction equipment was formed in 1999, following the merger of New Holland N.V. and Case Corporation. Fiat group owns more than 89% of the shares in CNH. CNH Global became a part of Fiat Industrial after the restructuring of Fiat. Fiat Industrial also includes Iveco (truck manufacturer) and portions of Fiat Powertrain.
We currently have an Outperform recommendation on CNH, with a Zacks #1 Rank (short-term Strong Buy rating) on the stock.
CNH GLOBAL NV (CNH): Free Stock Analysis Report
Get all Zacks Research Reports and be alerted to fast-breaking buy and sell opportunities every trading day.
Be the first to comment