CNH, parent company of ag equipment makers Case IH and New Holland, reported 1Q equipment revenues rose 6% year-over-year — +2% in Ag & +27% in Construction to ~$3.2 billion.
Equipment operating margins improved ~310bp year-over-year to 4.4%, as Ag margins increased 180bp year-over-year and Construction posted a $36 million loss vs. a $91 million loss in 1Q09.
CNH now forecasts global ag equipment industry sales will be flat to up 5% year-over-year in 2010. They had previously forecasted a 5-10% year-over-year decline and sees 15-20% year-over-year growth in global construction equipment industry sales. It previously projected CE sales would rise 5-10%.
According to Henry Kirn, analyst for UBS, CNH is targeting Ag equipment revenues of $10.8 billion (+1% year-over-year) in 2010 and Construction revenues of $2.6 billion (+24% year-over-year).
The company is targeting combined equipment operating margins between 5.7% and 6.1%, compared with 2.9% in 2009.
Looking ahead to 2014, CNH is targeting Ag revenues of $13.9 billion and Construction revenues of $4.5 billion, with combined equipment margins between 10.7% and 11.5%.