Revenue in CNH Industrial's construction business fell by more than 5% in the second quarter of this year compared with Q2 in 2018.
Construction segment revenue in Q2 2019 totalled US$757m, down 5.3% from US$799m in Q2 2018.
Global manufacturing group CNH says the decline in its construction segment was due to positive price realisation being more than offset by unfavourable volume and mix in North America due to selective inventory destocking actions in its dealer network. CRH adds that another reason for the net sales fall in construction was weaker end-user demand in certain key markets in the rest of the world.
Adjusted EBIT was US$25m in Q2 (US$33m in the second quarter of 2018), with adjusted earnings before interest and taxes (EBIT) margin of 3.3%. CNH adds that the positive net price realisation, mainly in North America, was more than offset by higher product costs primarily related to increased raw material costs and tariffs.
Giving its outlook for the rest of 2019, CNH says that end-user demand in the construction industry remains healthy, supported by spending for public and infrastructure investments. It adds that, despite this strength, conditions in the construction industry are still "challenged" in the residential sub-segment.
In the overall group results for Q2 2019, CNH Industrial posted adjusted net income of US$430m compared with US$397m in Q2 2018. It says that the increase in net income was due to a lower consolidated adjusted EBIT being more than offset by the non-repeat of foreign exchange losses incurred in 2018 primarily due to the volatility in emerging markets. Adjusted diluted earnings per share (EPS) was US$0.31 in Q2, compared with US$0.28 in Q2 2018.
CNH brands include Case Construction Equipment.
This article first appeared on our sister title Aggregates Business.
