CNH  Industrial announced its fourth quarter and full year 2023 results on Feb. 14. Full year 2023 consolidated revenues were $24.7 billion, up 5% year-over-year, with net sales of Industrial Activities at $22.1 billion, up almost 3%. Full year net income was $2,383 million compared to 2022 net income of $2,039 million. 

For the quarter, net income was $617 million vs. $592 million for the same period in 2022, a 4% year-over-year increase. Consolidated revenue was $6.79 billion in the quarter (down 2% compared to Q4 2022) and Net sales of Industrial Activities were $6.02 billion (down 5% compared to Q4 2022).

In the earnings release, CEO Scott Wine said, "Two years ago, we established ambitious margin targets for our Agriculture and Construction segments, which we achieved earlier than planned. These results, in conjunction with record full year revenue and net income, reflect the CNH team’s tireless efforts to simplify the company, expand through-cycle margins, integrate world-class technology with our great iron, and put our customers at the center of everything we do. With more challenging end markets in Q4, robust contributions from our cost reduction focus and disciplined commercial execution drove margin expansion, and we will remain aggressive on these fronts moving forward. I have tremendous confidence in this CNH team’s ability, regardless of market conditions, to create a bright future for our company, our customers, and our dealers."

Ag Sales Decline

Agriculture segment net sales for the full year were $18.12 billion, up 1% year-over-year. For the quarter, agriculture net sales were down 8% for the quarter to $4.95 billion, primarily due to lower industry volume, dealer inventory management and unfavorable mix, CNH said.

In a note to investors, Stanley Elliott, managing director, Stifel, wrote, “For 2024, CNHI expects industry sales to decline 10-15% in ag and construction to decline 5-10%. CNHI’s segment sales are expected to outperform industry declines and margins are expected to outperform past cycles. 

“We like what the company is doing to reduce product costs through logistics normalization, lean manufacturing principles, and strategic sourcing. With a healthy balance sheet and FCF generation ($1.2-1.4B expected in 2024), the company has ample flexibility to continue focusing on improving operations .”

2024 Outlook

CNH estimates ag industry retail sales will be down 10-15% in 2024 compared to 2023 and is forecasting its ag segment net sales to be down 8% and 12% year-over-year  currency translation effects. 

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