0001628280-25-037350
SEC filingLower shipment volumes on decreased industry demand and dealer destocking drove a 14.2% revenue decline and compressed Industrial Activities margins in Q2 2025.
For the three months ended June 30, 2025, CNH Industrial N.V. reported total revenues of $4,711 million, a decline of 14.2% (down 13.7% on a constant currency basis) compared to $5,488 million in the prior-year period. Net sales of Industrial Activities fell 16.3% to $4,021 million. The decline was primarily driven by lower shipment volumes on decreased industry demand and continued dealer destocking across both Agriculture and Construction segments. Net income attributable to CNH Industrial N.V. decreased 46.6% to $213 million from $399 million, as the revenue decline flowed through to profitability, partially offset by favorable net price realization and lower operating expenses. Gross margin (cost of goods sold as a percentage of net sales of Industrial Activities) contracted to 20.6% from 22.9% a year ago, impacted by lower production volumes, partially offset by improved purchasing and manufacturing costs. The effective tax rate increased to 27.6% from 20.9%, reflecting a shift in geographic income mix and lower discrete benefits.
In the Agriculture segment, net sales fell 17.0% to $3,248 million (down 17.1% on a constant currency basis). The decline was broad-based geographically, with North America down 35.7%, Asia Pacific down 26.7%, South America down 15.2%, partially offset by a 12.9% increase in EMEA. Industry demand weakened significantly in key markets: North American over-140 HP tractors fell 37% and combines declined 23%. Adjusted EBIT for Agriculture dropped 47.6% to $263 million, with margin contracting 470 bps to 8.1%, as lower shipment volumes were only partially offset by favorable net price realization and lower production, warranty, and SG&A expenses. R&D investment remained elevated at 6.0% of sales.
The Construction segment saw net sales decline 13.1% to $773 million (down 12.1% on a constant currency basis), mainly due to a 24.7% drop in North America, while EMEA and South America showed slight growth. Adjusted EBIT decreased to $35 million from $60 million, with margin declining 220 bps to 4.5%, driven by lower shipment volumes partially offset by favorable net price realization.
Financial Services revenues were essentially flat at $685 million (down 0.3% reported, up 2.0% constant currency), as negative currency translation and lower yields in Brazil offset higher remarketing sales and favorable volumes. Net income decreased $4 million to $87 million, impacted by increased risk costs in Brazil and a higher effective tax rate. The managed portfolio stood at $28.7 billion, with retail originations of $2.7 billion in the quarter. The receivable balance over 30 days past due rose to 3.9% from 2.5% a year ago, driven by higher delinquencies in Brazil.
Management noted that global economic disruptions from geopolitical events, trade policy changes, tariffs, and commodity price volatility are expected to persist through the rest of 2025, affecting customers' profitability and demand for products. The company continues to focus on cash preservation and leveraging access to funding to maintain solid financial strength and liquidity. At June 30, 2025, available liquidity stood at $9,266 million, including undrawn committed facilities of $5,925 million. The company did not provide specific quantitative guidance for the remainder of 2025, but the commentary points to ongoing headwinds from lower industry demand and dealer destocking, partially offset by cost actions and favorable net price realization.