By Giulio Piovaccari
MILAN – CNH Industrial beat first-quarter earnings expectations on Tuesday and the agricultural and construction machine maker’s CEO said he was confident the company could successfully navigate ongoing global supply chain issues.
“Don’t underestimate how difficult the environment is, it’s a battle,” CEO Scott Wine told analysts after the company posted a 9.2% rise in operating profit as demand remained “healthy”.
“But I am confident in our team’s ability to navigate the current environment,” he said regarding logistics pressures and semiconductor shortages.
Wine said the group was adapting production to the chip shortage and was delivering more to clients this quarter.
In its first results since spinning off Iveco Group, CNH Industrial reported $429 million in adjusted earnings before interest and tax (EBIT) for industrial activities in the January-March period, topping the $391 million forecast by analysts in a poll compiled by Reuters.
“Order books remain exceptionally strong, up almost 40% in agriculture and 80% in construction,” Wine said, confirming full-year forecasts the group had previously released.
CNH added, however, took a $71 million hit in the quarter due to the suspension of its Russian operations, including for asset writedowns.
It also saw negative cash flow generation from industrial activities of $1.059 billion, as “critical supply chain disruptions” constrained its ability to ship finished goods.
Milan-listed shares in CNH extended gains after results and were up 2.7% at 1520 GMT, outperforming a 1.5% rise for Italy’s blue-chip index.
At the beginning of the year, CNH completed the separation of its truck, bus and engine businesses, now listed under Iveco Group.