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CNH Industrial N.V.: Q3 FY2025 earnings call

What management said about Q3 FY2025, from the documents filed with the SEC on 7 November 2025: press release. Guidance figures: 3 raised, 3 lowered. The quarter’s numbers.

Key takeaways

  • Net sales fell on lower shipments: Industrial Activities net sales were $3.70 billion, down 7%. The company attributed the decline to lower shipments and channel destocking. Source
  • Diluted EPS $0.06 on $67 million: Net income was $67 million, against $310 million a year earlier. Diluted EPS was $0.06, against $0.24. Source
  • Agriculture margin fell to 4.6%: Agriculture adjusted EBIT was $137 million against $336 million. The margin was 4.6% against 10.2%, with tariffs, mix and SG&A weighing. Source
  • Brazil delinquencies raised past-due share: Receivables more than 30 days past due were 3.5% of receivables, against 2.2% a year earlier, mainly from higher delinquencies in Brazil. Source
  • Tariff costs shared with customers: Management said it continues to share net tariff costs with customers in the near term, which further reduced 2025 margins. Source
  • Fewer units built in 2025: Production was held below 2024 levels to reduce excess channel inventory, as industry demand fell. Source

“While the current trade environment remains challenging for our farmers and builders, CNH continues to take decisive actions to navigate near-term headwinds.”

Gerrit Marx, Chief Executive Officer

Guidance

AreaPeriodFigureAgainst last quarter
Agriculture net sales Sourcefull year 2025down between 11% and 13% year-over-yearRaised from down between 12% and 20% year-over-year, including -1% of currency translation effects
Agriculture adjusted EBIT margin Sourcefull year 2025between 5.7% and 6.2%Lowered from between 7% and 9%
Construction net sales Sourcefull year 2025down between 3% and 5% year-over-yearRaised from down between 4% and 15% year-over-year, including -1% of currency translation effects
Construction adjusted EBIT margin Sourcefull year 2025between 1.7% and 2.2%Lowered from between 2% and 4%
Free cash flow of Industrial Activities Sourcefull year 2025between $200 million and $500 millionRaised from between $100 million and $500 million
Adjusted diluted EPS Sourcefull year 2025between $0.44 to $0.50Lowered from between $0.50 to $0.70

What changed from last quarter

  • Guidance raised: Agriculture net sales range narrowed to down 11% to 13% from down 12% to 20%. Source
  • Guidance raised: Construction net sales range narrowed to down 3% to 5% from down 4% to 15%. Source
  • Guidance raised: Industrial free cash flow low end raised to $200 million from $100 million; high end unchanged at $500 million. Source
  • Guidance lowered: Agriculture adjusted EBIT margin range lowered to 5.7% to 6.2% from 7% to 9%. Source
  • Guidance lowered: Construction adjusted EBIT margin range lowered to 1.7% to 2.2% from 2% to 4%. Source
  • Guidance lowered: Adjusted diluted EPS range lowered to $0.44 to $0.50 from $0.50 to $0.70. Source
  • New: Strategic focus on methane technology narrowed to cleaning and upgrading methane waste, with an impairment of Bennamann IPR&D assets. Source

Quarter results and drivers

  • Net sales fell on lower shipments: Industrial Activities net sales were $3.70 billion, down 7%. The company attributed the decline to lower shipments and channel destocking. Source
  • Diluted EPS $0.06 on $67 million: Net income was $67 million, against $310 million a year earlier. Diluted EPS was $0.06, against $0.24. Source
  • Adjusted EBIT down 69%: Adjusted EBIT of Industrial Activities was $104 million, down 69%. Its margin was 2.8%, against 8.4%. Source
  • Adjusted EPS $0.08: Adjusted net income was $109 million, with adjusted diluted EPS of $0.08 against $0.24 a year earlier. Source
  • Tax expense and rate fell: Income tax expense was $1 million, with a 2.0% effective tax rate. The adjusted tax rate was 14.0%. Source

Agriculture segment

  • Agriculture sales down 10%: Agriculture net sales were $2.96 billion, down 10%. Lower North American shipments and destocking were partly offset by price and Eastern European demand. Source
  • Agriculture margin fell to 4.6%: Agriculture adjusted EBIT was $137 million against $336 million. The margin was 4.6% against 10.2%, with tariffs, mix and SG&A weighing. Source
  • North American demand lower: North American tractor volume was flat under 140 HP and fell 41% over 140 HP, with combines down 23%. In EMEA, tractors fell 2% and combines rose 19%. Source

“I am confident that the steps we are taking will position CNH for renewed growth and success as market conditions improve.”

Gerrit Marx, Chief Executive Officer

Construction segment

  • Construction sales rose 8%: Construction net sales were $739 million, up 8%, on higher shipments in North America and EMEA and favorable net price realization. Source
  • Construction margin fell to 1.9%: Construction adjusted EBIT was $14 million against $40 million, on tariff costs, unfavorable mix and higher SG&A, partly offset by price. Source
  • Construction industry volume up: Global construction equipment industry volume rose 6% for heavy equipment and 3% for light equipment in the quarter. Source

Financial Services and credit

  • Financial Services net income down 40%: Net income was $47 million, down $31 million, on higher risk costs, SG&A and lower volumes. Interest margins improved across all regions. Source
  • Brazil delinquencies raised past-due share: Receivables more than 30 days past due were 3.5% of receivables, against 2.2% a year earlier, mainly from higher delinquencies in Brazil. Source
  • Managed portfolio $28.5 billion: The managed portfolio, including unconsolidated joint ventures, was $28.5 billion, down $0.5 billion from a year earlier. Retail was 71% of it. Source

Costs, pricing and margins

  • Tariff costs shared with customers: Management said it continues to share net tariff costs with customers in the near term, which further reduced 2025 margins. Source
  • Mitigation offsets part of tariffs: Alternative sourcing, use of existing inventory and North American pricing actions have partly offset tariff headwinds, according to management. Source
  • Lean and sourcing cut product costs: Product cost reduction continues through lean manufacturing and strategic sourcing. SG&A and R&D spending is being managed carefully. Source
  • Adjusted gross margin 19.4%: Adjusted gross profit margin of Industrial Activities was 19.4%, against 21.7%. The reported gross margin was 19.1%. Source

Demand and production

  • Fewer units built in 2025: Production was held below 2024 levels to reduce excess channel inventory, as industry demand fell. Source
  • Lower volumes reduced segment margins: Management said lower production and sales have hit segment margins. Source
  • Disciplined production and channel reduction: Management said it is maintaining disciplined production levels and reducing channel inventories. Source

Capital, cash and returns

  • Operating cash flow $659 million: Net cash from operating activities was $659 million. Industrial free cash flow absorption was $188 million. Source
  • Absorption tied to seasonality: Management attributed the quarter's free cash flow absorption to normal working capital seasonality. Source
  • Nine-month operating cash flow higher: Nine-month operating cash flow was $1,593 million, against $276 million a year earlier. Source
  • Industrial net debt rose: Net cash (debt) of Industrial Activities was $(2,791) million at September 30, against $(1,727) million at December 31, 2024. Source
  • Dividends paid $322 million year to date: Dividends paid were $322 million for nine months, against $600 million. Declared dividends were $0.25 per share, against $0.47. Source

Strategy and investment

  • R&D ratio rose to 8.6%: R&D expenses were 8.6% of sales in the quarter, up from 6.0% a year earlier. Source
  • Impairment and write-down excluded: Adjusted results exclude a Bennamann IPR&D impairment and an inventory write-down on the Methane Power Tractor. Source
  • Quality and product launches cited: Management cited its commitment to quality and innovation, recent product launches and industry recognition. Source

Coming up, as management said on 7 November 2025

  • Full tariff offset expected over time: Management expects to fully offset tariff impacts over time through additional mitigation actions. Near-term cost sharing with customers continues. Source

Figures management reported

FigureReported
North America tractors under 140 HP industry volume Sourceflat year-over-year
North America tractors over 140 HP industry volume Sourcedown 41%
North America combines industry volume Sourcedown 23%
EMEA tractor demand Sourcedown 2%
EMEA combine demand Sourceup 19%
South America tractor demand Sourcedown 4%
South America combine demand Sourcedown 15%
Asia Pacific tractor demand Sourceup 19%
Asia Pacific combine demand Sourcedown 20%
Global heavy construction equipment industry volume Sourceup 6%
Managed portfolio Source$28.5 billion

Risks management discussed

  • Regulatory: Steel and aluminum tariff expansion in August 2025 has created additional exposure for CNH. Source
  • External: Management cites frequent changes in the global trade environment, alongside lower cyclical industry sales. Source
  • Operational: An unfavorable sales mix shift from North America to EMEA is affecting Agriculture margins. Source

Earlier plans management reported on

  • Not stated: Management said it remains focused on achieving its long-term strategic targets. Source
  • Not stated: Management said ongoing cost reduction efforts have partly mitigated margin erosion. Source

Other quarters

Summarised with AI from the documents the company filed with the SEC. Every point is checked against the filing before it is shown: management’s own words word for word, figures against the line or table row they come from. A point that fails the check is left out. Source opens the filing at that line.