CNH reported operating profit of $72 million in the third quarter, down from $339 million in the third quarter of 2008, on net sales of $2.96 billion — 32-percent lower than the third quarter of 2008.
The company’s third-quarter 2009 diluted net loss per share was ($0.11) compared with earnings of $1.06 in the third quarter of 2008. The net loss in the quarter was $25 million compared with net income of $252 million in the same period of 2008. These results include restructuring charges, after tax, of $3 million, compared with $7 million in the prior year.
The diluted net loss per share attributable to CNH common shareholders, for the first nine months of 2009, was ($0.92), compared with earnings of $2.99 in the first nine months of 2008.
“In the third quarter, faced with the continuing negative effects of the economic downturn, we saw the benefits of keeping a tight grip on production and costs,” said Harold Boyanovsky, CNH president and CEO. “Equipment Operations’ inventories and receivables were significantly reduced, generating positive cash flow from operating activities. Salaried and agency positions have also come down considerably and we are on track to achieve our year-end objective of reducing personnel by 11 to 12 percent. On the construction side, we implemented the management reorganization previously announced and now have a structure that is better aligned with the current construction equipment market.”
CNH expects global construction equipment industry retail unit sales to continue at levels close to those the company experienced in the first nine months of the year, with full-year industry retail unit sales down 40 to 45 percent compared with full year 2008, with light equipment markets down by 45 to 50 percent, and the heavy equipment markets declining by approximately 40 percent.
For the fourth quarter of 2009, CNH expects global construction equipment industry retail unit sales to be at the same relative levels as earlier in the year, but the percentage declines compared with the fourth quarter of 2008 to be less than earlier in the year. Due to the magnitude of the declines in the fourth quarter of 2008, the year-over-year comparisons for the fourth quarter of 2009 are less pronounced. In total, the company expects the industry retail unit sales to be down approximately 30 to 35 percent, with industry retail unit sales of light construction equipment to be down 25 to 30 percent and heavy construction equipment sales down approximately 30 to 35 percent.
“In the fourth quarter, the actions already in place will result in improvements to our operating results and a continuation of positive Equipment Operations’ cash flow,” Boyanovsky said. “We expect to further reduce working capital by $700 million in the fourth quarter, resulting in a full year working capital reduction of approximately $1 billion. We remain confident about the future of both our Agricultural and Construction Equipment businesses and expect to see improvement beginning in the fourth quarter.”
CNH Global N.V. is a world leader in the agricultural and construction equipment businesses. Supported by 11,300 dealers in 170 countries, CNH is composed of its Case and New Holland brand families, as well as its worldwide commercial, industrial, product support and finance organizations.
