CNH Industrial N.V. Q3 2026 Earnings Call Summary Moby Intelligence Mon, November 9, 2026 at 4:44 PM EST 4 min read NVDA -3.87% CNH +10.90% Explore stocks on Coinbase Trading disclosure Trading disclosure The above button links to Coinbase. Yahoo Finance is not a broker-dealer or investment adviser and does not offer securities or cryptocurrencies for sale or facilitate trading. Coinbase pays us for certain activity generated through this link. Prices displayed are informational.
Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here.
Management is transitioning CNH into a pure-play agriculture technology company by establishing a joint venture with Kobelco for its construction business, retaining a 30% stake to participate in future upside.
Third quarter performance was characterized by diligent execution through a challenging agricultural cycle, with industrial adjusted EBIT increasing 94% despite flat year-over-year net sales.
Agricultural segment sales declined 2% as volume weakness in South America and EMEA was only partially offset by favorable price realization and 2% growth in North America.
Operational discipline resulted in a sequential decline of approximately $100 million in new dealer inventories, while used inventories remain at or below pandemic levels.
The strategic alliance with Bourgault Industries was highlighted as a key driver for expanding the global seeding portfolio and accelerating the delivery of precision technology to customers.
Profitability in the quarter was significantly bolstered by $71 million in net IEEPA tariff refunds, though management reinvested a portion of these proceeds into clearing aged inventory and R&D.
Farmer sentiment remains pressured globally due to low commodity prices and high input costs, compounded by adverse weather in EMEA and restricted credit availability in Brazil.
Management identified 2026 as the likely trough for the North American agricultural cycle, supported by model year 2027 order intake that is currently in line with expectations.
Agricultural dealer inventories are projected to decline by an additional $150 million to $250 million in the fourth quarter to ensure production aligns with underlying retail demand entering 2027.
The Kobelco joint venture transaction is expected to close by the end of 2027, with the $700 million in expected cash proceeds earmarked for debt reduction and balance sheet strengthening.
Full-year 2026 margin impacts from tariffs are estimated at 185 basis points for agriculture and 470 basis points for construction, with management assuming similar impacts for the 2027 modeling period.
While North America shows signs of stabilization, management expects South America to remain challenged through 2027, with a meaningful replacement cycle recovery not anticipated until 2028.
The construction business divestiture values the segment at an enterprise value of $1 billion, representing an approximately 10x EBITDA multiple when excluding one-time tariff refunds.
Financial Services recorded a $156 million non-cash valuation allowance against deferred tax assets in Brazil, triggered by the 'passage of time' regarding elevated delinquency levels.
The company recognized $71 million in net IEEPA tariff refunds in Q3 but expects a net investment in Q4 as it funds discretionary programs to clear discontinued equipment inventories.
A 3-year lockup period applies to the 30% retained equity in the construction JV, after which a put-call construct allows for an eventual full transfer of ownership to Kobelco.
Management characterized the $1 billion valuation as a 10x multiple excluding IEEPA benefits, which they view as a fair transaction for both parties.
The deal allows CNH to focus capital on higher-returning agriculture investments while maintaining a 30% stake in a structurally stronger construction player.
One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here.
CNH will provide transition services to the JV through 2028, allowing time to eliminate back-office support costs.
Management expects no long-term negative impact on 'RemainCo' or agricultural margins once the transition period concludes.
In Brazil, the high velocity of machine usage (2-3 harvests per year) suggests a replacement cycle catalyst for combines will likely emerge in 2028.
Australia is viewed as a mature, stable market with no immediate 'green shoots' of recovery beyond regular replacement demand.
Management confirmed EOP uptake is currently in the 15% to 20% range, which is encouraging but should not be extrapolated to the entire global industry.
List pricing for model year 2027 products is generally landing between 3% and 3.5%.
Management noted that while the election outcome brought some initial uncertainty, farmers prioritize predictability and are now focused on weather challenges like El Niño.
Elevated delinquencies in Brazil are expected to remain a 'watch point' through 2027, with normalization anticipated in 2028 alongside the market recovery.
