London (UK) —This morning CNH Industrial (NYSE:CNHI) announced its consolidated revenues for the first quarter ended March 31, 2018, rose by 17.1% to $6.8 billion. Adjusted net income was $204 million for the first quarter of 2018 compared to $55 million for the same period of 2017.
Agricultural Equipment’s net sales increased 15% in the first quarter vs. the first quarter of 2017 (up 11% on a constant currency basis). The increase was the result of higher sales volumes and positive net price realization. Industry demand was overall flat, with strong industry volume in APAC and lower demand in LATAM.
NAFTA row-crop production matched retail demand, as a result of an achieved balanced inventory of used equipment. Price realization, net of a negative foreign exchange transaction impact, represented 2.5% of revenues, and was partially offset by raw material cost increases and higher overhead costs. The company continues to invest in its product development program for precision farming and compliance with Stage V emissions requirements.
Construction Equipment’s net sales increased 36% in the first quarter of 2018 compared to the first quarter of 2017 (up 32% on a constant currency basis), as a result of a solid rebound in worldwide demand and market share gains across most regions. Results were favorably impacted by higher sales volume due to improved end-user demand, as well as the related 30% increase in production. Pricing conditions remain favorable, more than offsetting unfavorable foreign exchange impact and raw material cost increases. The order book is up approximately 20% relative to the prior year period.
Commercial Vehicles’ net sales increased 17% in the first quarter of 2018 compared to the first quarter of 2017 (up 5% on a constant currency basis), primarily as a result of higher industry volumes in the light commercial vehicle market in Europe. Net sales increased in APAC and were flat in LATAM.
Powertrain’s net sales increased 19% in the first quarter of 2018 compared to the first quarter of 2017 (up 5% on a constant currency basis), as a result of higher sales volume in engine applications. Sales to external customers accounted for 48% of total net sales (45% in the first quarter of 2017).
Financial Services’ revenues totaled $502 million in the first quarter of 2018, a decrease of 2% compared to the first quarter of 2017. In the first quarter of 2018, retail loan originations (including unconsolidated joint ventures) were $2.2 billion, up $0.3 billion compared to the first quarter of 2017. The managed portfolio (including unconsolidated joint ventures) was $26.5 billion as of March 31, 2018 (of which retail was 62% and wholesale 38%), up $1.8 billion compared to March 31, 2017. Excluding the impact of currency translation, the managed portfolio increased $0.5 billion compared to the same period in 2017.
Net income was $103 million in the first quarter of 2018, an increase of $16 million compared to the first quarter of 2017, primarily due to a better performance in EMEA and LATAM, and due to the lower U.S. tax rate.
As a result of the stronger than anticipated results in the first quarter of 2018 and positive developments in end-user demand, CNH Industrial is increasing its net sales net sales of Industrial Activities of approximately $28 billion.