CNH Global announced financial results for the quarter and year ending Dec. 31, 2012. Net sales rose 8 percent on a reported basis (12 percent on a constant currency basis) in 2012, to $19.4 billion, with agricultural equipment accounting for 81 percent of sales. The high demand for agricultural equipment offset the negative effects of the economy on the construction equipment segment, which accounted for 19 percent of the company’s total sales.
Equipment operations generated $979 million in 2012, down 11 percent from 2011. Full year capital expenditures totaled $556 million, a 36 percent increase from 2011, largely as a result of investments in new manufacturing sites and product launches in both the agricultural and construction equipment segments.
CNH’s construction equipment full year 2012 net sales declined 3 percent on a reported basis (a 2 percent increase on a constant currency basis) as modest industry recovery in North America and Eastern Europe did not offset the continued demand slowdown in the other geographic regions. In response to the demand downturn, finished goods production in the fourth quarter was curtailed (21 percent vs. retail) to reduce company and dealer inventory levels to the prevailing market conditions which contributed to the $6 million operating loss for the year.
CNH’s worldwide production of construction equipment was 21% below retail sales during the quarter, as the group continued to balance inventory levels, as anticipated during the year, in line with the forecasted worldwide demand levels in 2013.
For 2013, the company expects agricultural equipment and construction equipment unit volume will each be flat to up 5 percent.