CNH Industrial N.V.

Q2 consolidated revenue was $4.8 billion, up 2% year over year, including about 2% positive currency impact. Adjusted EPS was $0.13 and adjusted net income was $161 million. Agriculture net sales were about $3.3 billion, up 1%, with gross margin at 19.7% versus 21.8% a year ago and adjusted EBIT margin at 5.2% versus 8.1%. Construction net sales were $866 million, up 12%, with gross margin at 11.9% versus 15.7% and adjusted EBIT margin at 1.7% versus 4.5%. Financial Services net income was $71 million, retail originations were $2.5 billion, and the managed portfolio ended at $28 billion. Free cash flow from industrial activities was $150 million. For 2026, CNH now expects Agriculture net sales to be about flat year over year and Ag EBIT margin to be 5% to 5.5%; Construction net sales to rise 5% to 10% and EBIT margin to be 1.8% to 2.3%; Industrial net sales flat to up 2%; Industrial adjusted EBIT margin 3.2% to 3.8%; Industrial free cash flow $200 million to $400 million; and adjusted EPS $0.41 to $0.46. Management also said Q3 Ag net sales and EBIT margin should be about flat year over year, while Q3 Construction sales should be up in the low to mid-teens and EBIT margin in a low to mid-single-digit range.

Gerrit Marx said CNH is still working through a difficult point in the agriculture cycle, but emphasized steady progress on quality, sourcing, manufacturing efficiency, and precision technology. He described the recovery as still incomplete, with dealer inventories and used equipment values normalizing faster than farm profitability, and said the base case remains an L-shaped recovery with 2027 retail demand broadly flat. He was constructive about dealer consolidation, AI-enabled solutions, and the company’s long-term strategy, while also noting CNH is pursuing possible construction partnerships to improve scale and competitiveness.

Jim Nickolas highlighted that Q2 Ag gross margin was 19.7% and Construction gross margin was 11.9%, both down from last year, primarily because of tariff pressure and mix. He said Ag adjusted EBIT margin was 5.2%, Construction adjusted EBIT margin was 1.7%, and industrial free cash flow was $150 million in the quarter. He also quantified the tariff outlook: expected 2026 tariff cost impact is now about 170 basis points in Agriculture and about 470 basis points in Construction, while noting that price/cost was positive in Q2 and expected to remain positive for the full year. On capital allocation, he cited the annual dividend of $126 million and $36 million of share repurchases at an average price of about $10.31 per share, and said corporate expenses are typically $55 million to $60 million per quarter.

Analysts focused on the implied step-up in Ag margins from Q3 to Q4 and what that means for 2027; management said the improvement is driven mainly by higher volumes, lower tariffs, pricing, and operational improvements, but cautioned that Q4 does not imply a double-digit EBIT margin. They also asked why full-year Ag guidance improved despite lower retail sales assumptions, and management pointed to modest outperformance in the first half, the one-time Brazil VAT-like tax credit, and better tariff and operational assumptions. Other questions covered dealer consolidation, market share, South America and EMEA weakness, and Construction’s 2027 outlook; management said dealer consolidation has not been a drag, market share gains are showing across regions, EMEA softened because of drought and higher input costs, and Construction should improve next year as demand stays constructive and tariffs stabilize.