0001567094-26-000011
SEC filingFlat revenues and collapsed net income due to tariff costs, lower volumes, and higher expenses in Q1 2026.
For the three months ended March 31, 2026, CNH Industrial reported consolidated revenues of $3,826 million, essentially flat compared to $3,828 million in the prior-year period. Net income attributable to CNH Industrial collapsed to $7 million from $131 million in Q1 2025, a 95% decline. The primary driver was a sharp drop in operating profitability: consolidated operating margin fell to approximately 0.3% from 4.2% a year earlier. Cost of goods sold as a percentage of net sales increased to 82.2% from 81.0%, attributed to tariff costs and lower production volumes. Selling, general and administrative expenses rose $79 million (20.5%) to $465 million, driven by higher credit risk provisions in Financial Services and higher labor costs. Research and development expenses increased by $48 million (26.1%) to $232 million due to higher variable compensation, new-product investment, and project timing. The effective tax rate rose to 30.8% from 29.0%, largely due to discrete items on a small profit base.
Agriculture net sales were nearly flat at $2,596 million (+0.6% YoY) as positive FX and favorable price realization offset lower volumes in all regions except EMEA. However, segment Adjusted EBIT plummeted to $27 million from $139 million, with margin contracting to 1.0% from 5.4%. Weakness was driven by lower shipment volumes in South America (-27.8% revenue decline) and North America (-3.3%), tariffs, higher SG&A and R&D expenses, and lower joint venture results.
Construction net sales fell 2.9% to $574 million, with declines in North America (-6.2%) and South America (-20.5%) partially offset by EMEA growth (+12.2%). The segment swung to an Adjusted EBIT loss of $28 million from a $14 million profit, with margin at -4.9% versus +2.4% a year ago. Tariffs, higher SG&A costs (trade show marketing, variable compensation, labor inflation), and lower volumes were the primary headwinds.
Financial Services revenues decreased 0.8% to $646 million, driven by lower volumes across most regions, reduced equipment sales from fewer operating lease maturities, and lower yields in EMEA, partially offset by favorable currency translation and higher yields in South and North America. Net income fell 16% to $74 million due to higher risk costs in Brazil and lower volumes.
Management characterizes the current environment as an ongoing cyclical downturn in agriculture equipment demand, particularly in North America, with tariff and input-cost pressures weighing on farmer sentiment. The Company's strategic focus remains on price discipline, production and inventory management, cost-reduction initiatives, and continued investment in Precision Technology and quality. No specific forward guidance was provided for revenue, margins, or EPS. The MD&A was filed on April 30, 2026.