CNH Industrial, a leading manufacturer of farm and construction equipment, has lowered its full-year profit forecast for the second time, citing slowing demand for its tractors and combines. The company now expects adjusted profit to be between $1.30 and $1.40 per share, down from a previous forecast of $1.45 to $1.55. This downward revision reflects the challenging market conditions facing the agricultural equipment industry.
The decline in demand is driven by falling crop prices and rising production costs, which are significantly impacting farm incomes globally. Farmers are facing pressure to reduce expenses, leading to a decrease in investment in new equipment. As a result, CNH expects its agriculture segment net sales to fall by 15% to 20% year-over-year, a steeper decline than previously anticipated.
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Despite these headwinds, CNH managed to exceed revenue estimates in the second quarter due to robust pricing and cost-cutting measures. The company has implemented initiatives to streamline operations and manage expenses, demonstrating its commitment to navigating the current market challenges.
Looking ahead, CNH plans to manage its business prudently in 2024 while positioning itself for growth in 2025. The company remains optimistic about the long-term prospects of the agricultural equipment industry and believes that its strong product portfolio and commitment to innovation will enable it to capitalize on future growth opportunities.