CNH Industrial N.V. Q1 2026 Filing Summary
Business Context and Reporting Period
This Form 10-Q covers the quarterly period ended March 31, 2026. CNH Industrial N.V. operates through three reportable segments: Agriculture, Construction, and Financial Services. The company is currently navigating a cyclical downturn in the agriculture equipment market, particularly in North America, driven by tariff pressures and input costs. Management views these trends as cyclical rather than structural.
Key Financial Metrics
| Metric | Q1 2026 | Q1 2025 |
|---|---|---|
| Total Revenues | $3,826 million | $3,828 million |
| Net Sales (Industrial Activities) | $3,170 million | $3,172 million |
| Net Income (GAAP) | $10 million | $132 million |
| Net Income Attributable to CNH | $7 million | $131 million |
| Diluted EPS | $0.01 | $0.10 |
| Adjusted EBIT (Industrial Activities) | $(45) million | $101 million |
| Operating Cash Flow | $35 million | $162 million |
| Total Debt | $25,904 million | $26,762 million (Dec 31, 2025) |
| Cash & Restricted Cash | $2,339 million | $3,229 million (Dec 31, 2025) |
| Effective Tax Rate | 30.8% | 29.0% |
Material Changes vs. Prior Period
- Profitability Collapse: Net income attributable to CNH dropped 95% year-over-year to $7 million, driven by a significant decline in Industrial Activities profitability.
- Segment Performance:
- Agriculture: Net sales increased 0.6% to $2,596 million due to favorable pricing and FX, but Adjusted EBIT plummeted from $139 million to $27 million due to lower volumes in North America and South America, tariffs, and higher SG&A/R&D costs.
- Construction: Net sales declined 2.9% to $574 million. The segment reported an Adjusted EBIT loss of $28 million compared to a profit of $14 million in the prior year, impacted by tariffs and lower volumes.
- Financial Services: Revenues were flat at $646 million. Net income decreased to $74 million due to higher credit risk provisions, specifically in Brazil.
- Expense Increases: SG&A expenses rose $79 million to $465 million, primarily due to higher credit risk provisions and labor costs. R&D expenses increased $48 million to $232 million due to new product investments.
- Liquidity: Total cash and restricted cash decreased by $890 million to $2,339 million, reflecting lower net income and debt paydowns.
Outlook, Risks, and Unusual Items
- Market Conditions: Management cites ongoing cyclical downturns, tariff impacts, and input cost pressures weighing on farmer sentiment, particularly in North America.
- Credit Risk: Significant increase in credit loss provisions in Brazil due to economic conditions, flooding, drought, and declining crop prices. Receivables greater than 30 days past due rose to 3.5% of the portfolio.
- Legal Contingencies:
- Poland Antitrust: A fine of approximately €57 million was imposed on CNH Polska; the company has appealed and does not expect a final decision for at least two years. No reserve has been recorded.
- Environmental: Ongoing remediation costs for 66 non-owned U.S. sites, with reserves of $23 million.
- Follow-on Damages: Potential liability related to the 2016 EU truck antitrust decision involving Iveco Group, though CNH expects recourse against Iveco.
- Subsequent Event: On April 20, 2026, CNH acquired a 30% equity interest in Abilene Machine LLC, a U.S. wholesale distributor of agriculture parts.
Investor Verification Checklist
- Brazil Credit Exposure: Verify the sustainability of the $131 million increase in retail reserves for Brazil and the impact of local economic conditions on future provisions.
- Tariff Impact: Assess the long-term effect of tariffs on Industrial Activities margins, which contributed to the swing from positive to negative Adjusted EBIT.
- Poland Antitrust Appeal: Monitor the status of the appeal against the €57 million fine and the potential for additional penalties or settlements.
- Debt Maturity Profile: Review the upcoming maturities of the $25.9 billion debt portfolio, particularly the asset-backed debt which decreased significantly in the quarter.
- Inventory Levels: Note the $583 million increase in net inventories to $5.2 billion; verify if this aligns with production plans or indicates potential obsolescence risks.