CNH Industrial released its second-quarter 2014 results, indicating revenues of $8.9 billion, up from $8.8 billion in the same period of 2013. Sales decreased slightly in the company’s Construction Equipment and Commercial Vehicle segments, and declined in the Agricultural segment, but were offset by increases in the Powertrain segment.
Net sales of Industrial Activities were $8.6 billion, up from $8.5 billion in Q2 2013. ￼￼￼￼￼￼￼￼￼￼￼￼￼￼￼￼￼￼￼￼￼￼￼￼￼￼￼￼￼￼￼￼￼￼￼￼￼￼￼￼￼￼￼￼￼￼￼￼￼￼￼￼￼￼￼￼￼￼￼￼￼￼￼￼￼￼￼￼￼￼￼￼￼￼￼￼￼￼￼￼￼￼￼￼￼￼￼￼￼￼￼￼￼￼￼￼￼￼￼￼￼￼￼￼￼￼￼￼￼￼￼￼￼￼￼￼￼￼￼￼￼￼￼￼￼￼￼￼￼￼￼￼￼Operating profit of Industrial Activities was $678 million in Q2 2014, a 1.2 percent decrease compared to Q2 2013 with an operating margin for the second quarter of 7.9 percent, in line with Q2 2013.
Net sales for Construction Equipment were $931 million for the quarter, down 0.9 percent. Industry volumes were down 10 percent and 2 percent in heavy and light, respectively, in the second quarter of 2014 compared to the prior year. ￼The Construction Equipment segment reported operating profit of $28 million compared to $13 million for Q2 2013, with an operating margin of 3.0 percent (1.4 percent for Q2 2013), as a result of continued price resilience in NAFTA and LATAM and cost containment actions, partially offset by negative volume and mix.
In June the company announced that it will close its assembly plant in Calhoun, Ga., in the third quarter of 2015. The closure is due to the company’s announced transition to a single excavator partner, and is part of the business footprint optimization program, which key to achieving the five-year operating profit target.
￼￼￼￼￼￼￼￼￼￼￼￼￼￼￼￼￼￼￼￼￼￼Commercial Vehicles posted second quarter net sales of $2.704 billion, flat with prior year. Commercial Vehicles delivered a total of 33,057 vehicles (including buses and specialty vehicles), representing a 3.6 percent decrease over Q2 2013. Volumes were higher in the light segment (+3.4 percent), while volumes declined in the heavy (-3.3 percent) and medium (-25.2 percent) segments. The segment closed the second quarter with an operating loss of $21 million compared to a loss of $11 million for Q2 2013.
Powertrain reported second quarter net sales of $1,250 million, an increase of 13.6 percent over Q2 2013 primarily attributable to higher volumes. Sales to external customers accounted for 41 percent of total net sales (33 percent in the same period in 2013).
During the quarter, Powertrain sold a total of 160,418 engines, an increase of 18 percent year-over-year. By major customer, 25 percent of engines were supplied to Agricultural Equipment, 24 percent to Commercial Vehicles, 5 percent to Construction Equipment and the remaining 46 percent to external customers (units sold to third parties were up 35 percent over Q2 2013). Additionally, Powertrain delivered 18,298 transmissions and 44,138 axles, an increase of 3 percent and 6 percent, respectively, compared to the same period in 2013.
Powertrain closed the second quarter with an operating profit of $64 million, up $10 million from the same period in 2013, with an operating margin of 5.1 percent (4.9 percent for Q2 2013). The improvement was mainly due to the increase in volumes and related industrial efficiencies.
Net sales for Agricultural Equipment were $4.436 billion for the quarter, down 2.3 percent from Q2 2013, driven by lower volumes, primarily in LATAM and NAFTA, as well as less favorable product mix, partially offset by net pricing. Segmentprofit was $632 million for the quarter ($646 million in Q2 2013).