CNH Global N.V. reported net sales for the quarter ended June 30, increased 9 percent to $5.5 billion. Equipment Operations posted an operating profit of $659 million or 12 percent of net sales for the quarter, as increased volumes and positive net pricing in the agricultural equipment segment more than compensated for the reduction in volume in the construction equipment segment, higher selling, general and administrative expenditures and higher research and development expense.
Equipment Operations generated $856 million in operating cash on a year-to-date basis, an increase of $575 million from the same period in 2012. This improvement is a result of the increase in earnings for the period, and strong working capital management. Through the second quarter, capital expenditures totaled $192 million, as the company continues to implement its strategic plan of investments in new manufacturing sites and an enhanced product portfolio. Capital expenditures for new product launches (inclusive of interim and final Tier 4 emission compliant equipment) represented 31 percent of the total capex. CNH's Equipment Operations ended the period with a net cash position of $3.6 billion.
Net income, before restructuring and exceptional items, was $473 million for the quarter, an increase of 33 percent, driven by continued solid market conditions in the agricultural equipment sector, satisfactory industrial performance, and improved results from the group’s financial services business. Diluted earnings per share were $1.93 (before restructuring and exceptional items), up 31 percent compared to $1.47 per share for the second quarter of 2012.
CNH’s construction equipment second-quarter net sales decreased 6 percent as market conditions remained challenging in most regions. Operating profit was $12 million for the quarter as the company continued to manage inventory levels matching production volume to retail demand, deployed production efficiency initiatives and improved price recovery.
Second-quarter net income attributable to CNH Financial Services increased 33 percent to $104 million compared with $78 million in the second quarter of 2012. Increased results were primarily due to a higher average portfolio and a lower provision for credit losses.
At June 30, delinquent receivables greater than 30 days past due were 0.8 percent of on-book managed receivables, down from 1.2 percent and 1.6 percent at Dec. 31 and June 30, 2012, respectively.
CNH Global N.V. manufactures the Case and New Holland brand families of construction and agriculture equipment. It is headquartered in Burr Ridge, Ill.