© Reuters. Italian-American Industrial vehicle maker CNH’s logo is pictured at an event held to present CNH’s new full-electric and Hydrogen fuel-cell battery trucks in partnership with U.S. Nikola event in Turin, Italy, December 3, 2019. REUTERS/Massimo Pinca/File
By Bianca Flowers and Aatreyee Dasgupta
(Reuters) -CNH Industrial reported a higher fourth-quarter profit on Wednesday, boosted by strong prices for its tractors and precision agriculture machinery.
Shares for the Italian-American company were up 3.6% in premarket trading on the NYSE.
Price increases across the manufacturer’s machinery segments helped augment margins amid slowing demand and a revenue shortfall for agriculture and construction equipment. CNH executives have said demand for high-horsepower tractors is a sign that farmers haven’t pulled back entirely on spending despite volatility in crop commodities and a lower forecast for farmer income for 2024.
The combine harvester maker, which has declared its aim of feeding a growing world population, has focused on autonomous agriculture machinery. This has led to investments in a suite of precision technology products, such as a driverless tillage and seed-by-seed planting to deliver higher yields and help farmers cut costs.
Revenue for industrial activities declined 5% from the same time a year ago. The company is forecasting retail sales for agriculture equipment that accounts for the bulk of its operating profit to be down between 10 to 15% compared to last year.
CNH, faced with slowing demand in Brazil, has also rolled out a restructuring plan entailing a 5% reduction of its salaried workforce and a revision of its cost structure, aimed at lowering 10% to 15% of its operational expenses collectively.
The agricultural and construction equipment maker posted an adjusted fourth-quarter profit of 42 cents per share compared to 36 cents per share a year ago. Quarterly revenue came in at $6.79 billion, down 2% from a year ago.