Published by Global Banking and Finance Review
Posted on August 1, 2025
By Abhinav Parmar
(Reuters) -Farm and construction equipment maker CNH Industrial expects a muted finish to the year due to tariff impacts, despite posting second-quarter results above expectations on Friday.
The Basildon, UK-based company said most units sold in the second quarter had limited impact from additional tariffs.
The effects will come through more in the second half of the year as tariff-affected inventory flows through the production system, CFO James Nikolas said.
CEO Gerrit Marx said in a post earnings call that much will depend on the scope and timing of U.S. tariffs and how trade partners respond.
CNH plans to offset future tariff costs through more price hikes and cheaper sourcing.
It expects 2025 sales to drop below last year's levels, but reaffirmed its annual forecasts.
While the company is now tracking ahead of its full-year guidance, tariff impact is weighted to the second half of the year, Oppenheimer analyst Kristen Owen said.
The company had reported second-quarter profit and revenue above Wall Street estimates earlier on Friday, helped by stronger pricing and cost cutting.
It reported an adjusted profit of 17 cents per share for the quarter ended June 30, above analysts' expectations of 14 cents per share, according to data complied by LSEG.
Its total costs and expenses in the reported quarter dropped to $4.43 billion, from $5.03 billion last year.
Quarterly revenue fell 14% to $4.71 billion, but was above analysts' estimates of $4.17 billion.
CNH has been producing tractors and combines below retail demand to reduce excess dealer inventories in a cyclical period of lower sales – a strategy also adopted by peers Deere, AGCO and Caterpillar.
It said it will align its production levels with retail demand by 2026.
(Reporting by Abhinav Parmar in Bengaluru; Editing by Shailesh Kuber and Sahal Muhammed)
