CNH Industrial (37C) Q2 2026 Earnings Report

The call presented a mixed picture: modest revenue growth and notable Construction strength, disciplined operational progress (procurement, dealer consolidation, pricing positive vs. cost), and improved guidance in some areas, but these positives are offset by significant margin compression from tariffs and product mix, sharp weakness in South America, H1 negative industrial free cash flow, and constrained farm economics. Management highlighted concrete strategic actions and potential tailwinds (underproduction correction, tariff rate reductions, sourcing savings), but material near-term demand and profitability headwinds remain.

Management updated 2026 guidance with Agriculture net sales now expected to be about flat year‑over‑year (including ~2% favorable currency) with positive pricing of 1.5–2% and Agriculture adjusted EBIT margin narrowed to 5.0–5.5%; Construction net sales raised to +5–10% (including ~2% currency and ~1% pricing) with Construction EBIT margin 1.8–2.3%; Industrial net sales are forecast flat to +2% with Industrial adjusted EBIT margin 3.2–3.8%, Industrial free cash flow of $200–$400 million, and adjusted EPS narrowed to $0.41–$0.46. Q3 color: Agriculture sales and EBIT about flat YoY; Construction sales expected up low‑to‑mid teens with EBIT in the low‑to‑mid single digits; dealer inventories targeted to be reduced by $400–$500 million by year‑end. Recent Q2 results (not included in the full‑year outlook for refunds) were consolidated revenues $4.8 billion (+2% YoY), Agriculture sales ~$3.3 billion (+1%), Construction sales $866 million (+12%), Q2 adjusted net income $161 million (EPS $0.13), industrial free cash flow $150 million, Financial Services retail originations $2.5 billion, managed portfolio $28 billion and delinquencies of 4.4%. Guidance excludes additional IEEPA tariff refunds beyond the $5 million received in Q2 (Phase 2 claims ~ $135 million, Phase 3 ~ $15 million) and reflects updated Section 232 tariff impacts (~170 bps headwind in Ag, ~470 bps in Construction) with Q3 tariffs ~flat YoY and Q4 slightly lower.