CNH Global N.V. (NYSE: CNH) today announced financial results for the quarter ended June 30, 2013. Net sales for the quarter increased 9% (10% on a constant currency basis) to $5.5 billion. Equipment Operations posted an operating profit of $659 million or 12% of net sales for the quarter, as increased volumes and positive net pricing in the agricultural equipment segment more than compensated for the reduction in volume in the construction equipment segment, higher selling, general and administrative expenditures and higher research and development expense. The 33% effective tax rate for the quarter is within the Group’s full year 2013 forecast range of 31% to 34%. 

Equipment net sales in the quarter comprised 83% agricultural equipment and 17% construction equipment. The geographic distribution of net sales in the quarter was 43% North America, 32% EAME & CIS, 17% Latin America, and 8% APAC markets. 

Equipment Operations generated $856 million in operating cash on a year-to-date basis, an increase of $575 million from the same period in 2012. This improvement is a result of the increase in earnings for the period, and strong working capital management. Through the second quarter, capital expenditures totaled $192 million, as the Company continues to implement its strategic plan of investments in new manufacturing sites and an enhanced product portfolio. Capital expenditures for new product launches (inclusive of interim and final Tier 4 emission compliant equipment) represented 31% of the total CAPEX. CNH's Equipment Operations ended the period with a net cash position of $3.6 billion. 

Net income, before restructuring and exceptional items, was $473 million for the quarter, an increase of 33%, driven by continued solid market conditions in the agricultural equipment sector, satisfactory industrial performance, and improved results from the Group’s financial services business. This resulted in the Group generating diluted earnings per share of $1.93 (before restructuring and exceptional items), up 31% compared to $1.47 per share for the second quarter of 2012.

2013 Full Year Market Outlook

-      Agricultural equipment unit volume is expected to be up approximately 5%

-      Construction equipment unit volume is expected to be flat to down 5%

CNH Guidance For The Full Year 2013

-      Revenues up ~5%

-      Operating Margin between 8.5% and 9.0%

CNH Agricultural Equipment Second Quarter Results

CNH’s agricultural equipment second quarter net sales increased 13% (13% on a constant currency basis) driven by increased volume, positive net pricing, and favorable product mix. All of the Group’s geographic regions except APAC reported increased revenue. Operating profit increased by $140 million to $647 million yielding an operating margin of 14.3%, up 1.7 percentage points compared to the second quarter of 2012. 

CNH worldwide production of agricultural equipment was 7% above retail sales in the quarter in anticipation of scheduled maintenance and repair downtime scheduled for the 3^rd quarter in NAFTA and EAME. 

Case IH launched the 370 CVX Magnum, the most powerful model in the Case IH range of conventional, rigid-chassis tractors, in the EAME region in April at Bauma in Germany. Case IH launched three new Maxxum EP (Efficient Power) tractors at Cereals 2013 in the UK, extending the company’s use of its CVT technology into the four-cylinder, medium-power class. Case IH also announced two new RB 5 Series variable-chamber round balers at Cereals 2013. 

The Case IH multi row A8800 – the first sugarcane harvester with variable row spacing – was awarded the Gold Gerdau “Best of the Land” Trophy for best new product at the Agrishow in Ribeirao Preto, Brazil.

In EAME & CIS region, at the Moroccan SIAM fair, New Holland Agriculture launched the new TD5 tractor series. The new 2WD version of the TDF orchard tractor series, specially designed for the South African market, was officially introduced to the public at the NAMPO Harvest Day. The three models have reduced front wheel track width and power ranging from 65 to 80 horsepower. In North America, New Holland also launched the latest generation CX8000 Elevation Super Conventional combines, the world’s most powerful strawwalker combine. The Genesis T8 tractor, equipped with Auto Command CVT, has been also introduced to the market. In Latin America, at the Agrishow, New Holland introduced the redesigned TL tractor series with engine power ranging from 65 to 104 horsepower. 

In APAC, on June 18th, New Holland Agriculture celebrated the milestone of the 250,000th tractor manufactured at its Greater Noida facility, India. 

CNH Construction Equipment Second Quarter Results

CNH’s construction equipment second quarter net sales decreased 6% (-5% on a constant currency basis) as market conditions remained challenging in most regions. Operating profit was $12 million for the quarter as the Company continued to manage inventory levels matching production volume to retail demand, deployed production efficiency initiatives and improved price recovery.

In North America, Case Construction Equipment made a significant entry into the waste and recycling markets with the introduction of waste handler wheel loaders and special guarding packages for the skid steer lineup, among other products. Four new models in the C Series line of hydraulic excavators, two standard and two minimum-swing radius excavators were also introduced.

In Europe, the Tier 4A/Stage IIIB emission compliant powered Case 621F wheel loader made its first appearance at the Bauma exhibition in April. Also displayed at Bauma were two Tier 4B/Stage IV emission compliant midi excavators: the short radius CX75 SR and the conventional CX80C.

Case Construction Equipment launched the new M Series dozers in the CIS, Asia Pacific and Chinese markets. In China, Case Construction Equipment was recognized with the “Top 50 Award”, the most prestigious recognition in China’s construction equipment industry, with the “Golden Award for Best Application” for its WX210 wheeled excavator with hydraulic lifting cab.

Case Construction Equipment launched the ProCare maintenance and support program for the North American market. ProCare is a program specific to the heavy equipment line and includes a three-year Advanced Case SiteWatch telematics subscription, a three-year/3,000-hour full-machine factory warranty, and a three-year/3,000-hour planned maintenance contract. ProCare offers customers the highest level of support in the industry for increased uptime, lower operating expenses and improved life cycle costs.

In Europe, New Holland Construction built on the success of its W170C wheel loader in the recycling industry by launching a new version, equipped with a new heavy duty cooling box and a full package of protections for extra operator safety and machine durability, specially designed for these applications. New Holland also launched the new L230 skid steer loader and C238 compact track loader at the Bauma 2013 exhibition in Germany in April.

New Holland continues to expand its offering in the CIS and Asia Pacific markets with the introduction of three new C Series dozer models, ranging from 13 to 20 tons, and featuring advanced, fuel-efficient engines that guarantee high power efficiency and low operating costs and that are available in specific emission- compliant engine configurations dedicated to these markets.

CNH Financial Services Second Quarter Results

Second quarter net income attributable to Financial Services increased 33% to $104 million compared with $78 million in the second quarter of 2012. Increased results were primarily due to a higher average portfolio and a lower provision for credit losses.

At June 30, 2013, delinquent receivables greater than 30 days past due were 0.8% of on-book managed receivables, down from 1.2% and 1.6% at December 31, 2012 and June 30, 2012, respectively.

CNH Capital LLC

The following is disclosed on behalf of CNH's North American financial services subsidiary, CNH Capital LLC and its consolidated subsidiaries ("CNH Capital").

CNH Capital LLC Second Quarter Results

Second quarter net income attributable to CNH Capital was up 28% primarily due to a higher average portfolio, stronger financial margins and a lower provision for credit losses.

The receivables balance greater than of managed receivables was 0.4%, 0.5% and 0.6% at June 30, 2013, December 31, 2012 and June 30, 2012, respectively.

Unconsolidated Equipment Operations Subsidiaries

Second quarter results for the Group's unconsolidated Equipment Operations subsidiaries were $29 million, up $4 million from the comparable period of 2012.

Strategic Combination Between Fiat Industrial S.p.A. and CNH Global N.V.

On July 23, 2013, at an extraordinary meeting of shareholders, CNH shareholders approved the merger between Fiat Industrial S.p.A. and CNH Global N.V. with and into a newly established company to be named CNH Industrial N.V.

About CNH

CNH Global N.V. is a world leader in the agricultural and construction equipment businesses. Supported by approximately 11,500 dealers in approximately 170 countries, CNH brings together the knowledge and heritage of its Case and New Holland brand families with the strength and resources of its worldwide commercial, industrial, product support and finance organizations. CNH Global N.V., whose stock is listed on the New York Stock Exchange (NYSE: CNH), is a majority-owned subsidiary of Fiat Industrial S.p.A. (FI.MI). More information about CNH and its Case and New Holland products can be found online at www.cnh.com.