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Key Factors Influencing CNH Industrial's (CNHI) Q3 Earnings

CNH Industrial CNHI is slated to release third-quarter 2021 results on Nov 4, before the opening bell. The Zacks Consensus Estimate for the quarter’s earnings and revenues is pegged at 22 cents per share and $7.62 billion, respectively.

This Italian-American vehicle maker came up with better-than-anticipated earnings in the last reported quarter. This outperformance was driven by higher-than-anticipated revenues and profits from industrial activities.

Over the trailing four quarters, CNH Industrial outpaced estimates on all occasions, with the average being 179.7%. This is depicted in the graph below:

CNH Industrial N.V. Price and EPS Surprise

CNH Industrial N.V. price-eps-surprise | CNH Industrial N.V. Quote

Trend in Estimate Revisions

The Zacks Consensus Estimate for CNH Industrial’s third-quarter earnings per share has been revised downward by a penny in the past 30 days. While the bottom-line projection indicates an increase from the year-ago earnings of 11 cents per share, it calls for a decline from second-quarter EPS of 42 cents. The Zacks Consensus Estimate for quarterly revenues suggests a year-over-year increase of 12.8% and a sequential dip of 14.4%.

Earnings Whispers

Our proven model does not conclusively predict an earnings beat for CNH Industrial this time around. The combination of a positive Earnings ESP, and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold), increases the odds of an earnings beat. However, that is not the case here as elaborated below.
Earnings ESP: CNH Industrial — whose peers include Deere DE, Caterpillar CAT and BorgWarner BWA — has an Earnings ESP of -0.49%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: It currently carries a Zacks Rank of 4 (Sell).

You can see the complete list of today’s Zacks #1 Rank stocks here.

Key Factors

CNH Industrial’s third-quarter 2021 results are likely to reflect the negative impact of the global supply crunch and rising commodity, freight, and logistics costs. The shortage of semiconductor supply is likely to have impacted the firm’s production, thereby inducing lost revenues. As such, the Zacks Consensus Estimate for third-quarter net industrial sales (comprising Agricultural Equipment, Construction Equipment, Commercial and Specialty vehicles as well as Powertrain segments) is pegged at $6,909 million, indicating a decline from $8,490 million recorded in the prior quarter.

The Zacks Consensus Estimate for revenues from Commercial & Specialty, Construction Equipment, Agricultural Equipment, and Powertrain segments is pegged at $2,788 million, $612 million, $3,263 million and $954 million, suggesting a sequential fall of 13.4%, 24.2%, 17.8%, and 25.8%, respectively. The consensus estimate for revenues from Financial Services is $420 million, indicating a marginal decline from $439 million recorded in second-quarter 2021.

The agriculture, construction, and vehicle equipment manufacturer has been bearing the brunt of rising SG&A and R&D costs over the last few quarters and the trend is expected to have continued in the to-be-reported quarter, thereby clipping margins. Rising capital expenditure for the development of technically-enhanced products may also have dented the company’s cash flows in third-quarter 2021.

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Caterpillar Inc. (CAT): Free Stock Analysis Report
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CNH Industrial N.V. (CNHI): Free Stock Analysis Report
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