CNH Global sales increased 3 percent in the second quarter, to $5 billion. Construction equipment accounted for $1 billion, down 3 percent over the previous year.
Construction Equipment Financials, 2Q v. year prior
- Net sales: $1.001 billion, -2.8 percent
- Gross profit: $138 million, unchanged
- Gross margin: 13.8 percent, +0.4 points
- Operating profit: $17 million, -32%
- Operating margin: 1.7%, -0.7 points
CNH said market conditions for construction equipment remained largely flat to Q1 2012 in the North American market and improved equipment availability drove higher sales in the EAME & CIS markets. Challenging market conditions in Europe and Brazil, coupled with the negative effects of currency translation led to a comparative period
margin decline of 70 basis points from the prior period.
Worldwide construction equipment market share was up in the second quarter, with gains in EAME & CIS and APAC light equipment markets and the North American heavy sector, as a result of new product launches and
good equipment availability.
Worldwide production of construction equipment was moderately above retail sales during the quarter. The Group expects to moderately reduce construction equipment manufacturing levels, primarily in Latin America and Europe, to balance inventory levels over the remainder of the year.
Gross profit for overall equipment operations rose 21 percent.
Year-to-date capital expenditures in the quarter totaled $206 million, a 64% increase from the comparable 2011 period, largely as a result of investments in new manufacturing sites and product launches in both the agricultural and construction equipment segments. Through the second quarter, 72% of the capital expenditures were on new product development (inclusive of interim and final Tier 4 emission compliant
equipment) and production capacity.