CNH Revenue Rises 20% to $3.5 Billion
Press Release by Issuing Company
Monday, November 1st, 2010
Net Sales up 20% to $3.5 billion (with minimal impact from foreign exchange)
Agricultural Equipment +12.8%
Construction Equipment +52.4%
Operating Profit of $239 million, up $167 million, at a 6.8% margin
Third quarter EPS before exceptional items at $0.43 per share, compared to loss of $0.09 per share in third quarter 2009
FY 2010 revenue and operating profit expected to beat high end of April guidance
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CNH Global N.V. (NYSE: CNH) announced financial results for the third quarter ended September 30, 2010. For the quarter, Net Sales increased 19.6% (19.8% on a constant currency basis) to $3.5 billion due to solid performances delivered in the Americas and Rest of World regions augmented by a stabilization of trading conditions in Europe. Equipment Operations posted an Operating Profit of $239 million as a result of higher volumes, reduced industrial costs, and favorable product mix.
Net Sales were 78% agricultural equipment and 22% construction equipment for the quarter, as improving construction equipment unit demand continued to bring the Group's revenue distribution back to historical norms. The geographical distribution of revenue for the period was 44% North America, 19% Western Europe, 19% Latin America, and 18% Rest of World.
Equipment Operations generated $1.2 billion in cash flow from operating activities over the first three quarters of the year. Year-to-date capital expenditures totaled $153 million, a 11% increase from the comparable period, primarily in preparation for new product launches and engine emissions compliance upgrade; full year capital expenditures are expected to be in the $300 million range. CNH's Equipment Operations ended the period with a net cash position of $1.8 billion, an increase of $1.9 billion compared to the end of the third quarter in 2009. The 33% effective tax rate for the third quarter 2010 is within the Group's long term expectations of 32% to 36%, as a result of tax incentives and tax return to provision filing differences, which largely offset the impact of not recording a tax benefit on losses in Europe for which conditions for their recognition are not currently satisfied.
Net Income before restructuring and exceptional items for the period of $102 million ($83 million inclusive of exceptional items) resulted in the Group generating a third quarter EPS of $0.43 ($0.35 inclusive of exceptional items) compared to a loss of $0.09 in the comparable prior year period.
2010 Market Outlook
CNH anticipates that global agricultural equipment markets will be up 0-5% for FY 2010. The CNH outlook for the global construction equipment markets is for an increase of 40 % to 45% in 2010.
2010 CNH Outlook
In view of the Group's performance through the first three quarters and current forecasts for trading activity in the remainder of the year, CNH anticipates that it will achieve the following financial targets: Net Sales in excess of $14.3 billion, Operating Profit of $900 million and net industrial cash of $1.3 billion.
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