Breaking News
Get Actionable Insights with InvestingPro+: Start 7 Day FREE Trial Register here
Investing Pro 0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

CNH Industrial sees supply chain disruptions easing next year

Stock MarketsNov 04, 2021 12:06PM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters. FILE PHOTO: Flags with CNH Industrial logo are pictured outside CNH Industrial building in Turin, Italy, February 5, 2020. REUTERS/ Massimo Pinca/File Photo

MILAN (Reuters) -Italian-American vehicle maker CNH Industrial (NYSE:CNHI) said it sees a better supply chain situation next year, after trimming its 2021 outlook on Thursday due to a mix of chip shortages, raw material price inflation and increased freight costs.

Chief Executive Scott Wine said while demand remained robust the company was currently seeing worsening component availability issues that were affecting many of its product lines.

"We are aggressively working to mitigate the situation and expect improvements throughout this quarter and limited impact on 2022," Wine told analysts after the group trimmed its full year forecasts despite strong third quarter data.

The maker of farm machinery, construction equipment, Iveco commercial vehicles and powertrains, said its 2021 revenues were now seen at the lower end of the range it provided three months ago, indicating a rise of between 24-28%.

Chief Financial Officer Oddone Incisa told analysts that the impact of component shortages should peak in this quarter, while some raw material prices were expected to stay high for longer and freight costs to diminish only at the end of 2022.

Milan-listed shares in CNH Industrial fell after its results were released but later recovered and were flat by 1556 GMT. Early in the session they hit an all-time high of 15.58 euros.

CNH also slightly trimmed its free cash flow forecast for the year to around $1.0 billion, while supply chain disruptions contributed to a $700 million cash burn in the third quarter, it said.

The group last month announced temporary shutdowns of plants in Europe due to disruptions in procurements and a shortage of core components, especially semiconductors, and on Thursday it said it did not rule out that additional closures might occur.

In the July-September period the group's adjusted earnings before interest and tax (EBIT) of industrial activities almost doubled, led by strong demand for agricultural machinery. They stood at $469 million, topping a $437 million forecast in an analyst poll compiled by Reuters.

Orders more than doubled year on year in the quarter both for tractors, in all regions, and for combines, especially in North America and Europe, CNH said.

As it prepares to spin off, under the Iveco Group name, its lower-margin truck, bus and engine operations, CNH earlier this year announced the $2.1 billion purchase of U.S.-based Raven (NASDAQ:RAVN) Industries to bolster its in advanced areas of precision agriculture and autonomy.

Wine said on Thursday he was confident the deal would be finalised later this month.

Earlier this week CNH announced it had entered into a licensing agreement for electrification technologies with Monarch Tractor, a U.S company focused on fully-electric autonomous tractors.

The CEO confirmed CNH was on track to complete the spin off plan early in the first quarter of next year.

CNH Industrial sees supply chain disruptions easing next year
 

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email