CNH Industrial reported net income of $35 million, or $0.02 per basic and diluted share, for Q3/26, compared with $67 million, or $0.06 per share, in Q3/25.
The results include a $156 million non-cash charge to establish a valuation allowance against Financial Services’ deferred tax assets in Brazil. Adjusted net income, a non-GAAP measure, was $205 million, compared with $109 million in Q3/25, and adjusted diluted EPS, also a non-GAAP measure, was $0.16. The results also include $109 million in pre-tax IEEPA tariff refunds recognized during the quarter.
Consolidated revenues were $4.35 billion, and net sales of Industrial Activities were $3.68 billion, both essentially in line with Q3/25. Net cash provided by operating activities was $686 million, and free cash flow used in Industrial Activities was $10 million.
Income tax expense was $204 million, compared with $1 million in Q3/25, for an effective tax rate (ETR) of 89.9% vs. 2.0%. The adjusted ETR, a non-GAAP measure, was 20.6%, compared with 14.0% in Q3/25. The valuation allowance charge adversely affected reported net income and the ETR for the quarter.
CNH announced a separate agreement Nov. 9 with Kobelco Construction Machinery Co., Ltd., a wholly owned subsidiary of Kobe Steel, Ltd., to establish CNH’s Construction Equipment business as a joint venture under Kobelco’s majority ownership. More information is available at investors.cnh.com.
Gerrit Marx, CEO at CNH, said the quarterly results and the Kobelco agreement reflect progress in executing the company’s strategy.
“Stronger quality performance, supply chain focus and operational efficiencies reflect disciplined execution in a challenging market environment,” Marx said. “We reinvested approximately 35% of tariff refunds received in the quarter in selective time-limited one-time efforts to clear aged inventory and accelerate our transformation. Our Agriculture segment used almost half of its refunds received in Q3 and will have reinvested over 90% by year end in discrete time-limited priorities. Although current conditions in EMEA and Brazil remain volatile, improving cycle indicators in North America reinforce our confidence in the path ahead.”
Marx said the Kobelco agreement follows a deliberate process to strengthen the construction business and sharpen CNH’s focus on agriculture.
“The transaction positions CNH as the largest pure-play agriculture machinery OEM, with the ability to invest organically and inorganically as the agriculture industry moves toward recovery,” Marx said.
Agriculture
In North America, Q3 industry sales volume was down 12% year over year for tractors under 140 HP and down 5% for tractors over 140 HP, while combines were down 13%. In Europe, Middle East and Africa (EMEA), tractor and combine demand were down 4% and 3%, respectively. In South America, tractor and combine demand declined 22% and 19%, respectively. In Asia Pacific, tractor demand decreased 4%, while combine demand increased 76%.
Agriculture net sales decreased 2% to $2.9 billion, driven by lower volumes in South America and EMEA, partially offset by growth in Asia Pacific and by favorable price realization.
Agriculture adjusted EBIT increased to $173 million from $137 million in Q3/25, and the adjusted margin increased 140 bps to 6.0%. The improvement primarily reflects IEEPA tariff refunds recognized during the quarter and better quality-related costs, partially offset by lower volumes in South America and EMEA.
Construction
Global industry sales volume for construction equipment increased 13% year over year in Q3 for heavy equipment and 6% for light equipment. Aggregated demand increased 10% in North America, 5% in EMEA, 14% in South America and 10% in Asia Pacific.
Construction net sales increased 5% to $777 million, driven by higher volumes in North America, partially offset by lower volumes in South America.
Construction adjusted EBIT increased to $65 million from $14 million in Q3/25, primarily reflecting IEEPA tariff refunds recognized during the quarter and lower SG&A expenses, partially offset by lower volumes in South America. The adjusted margin was 8.4%, compared with 1.9% in Q3/25.
Financial Services
Financial Services revenues decreased 3% to $665 million, mainly due to lower volumes in South America and North America and lower yields in most regions. The decrease was partially offset by favorable currency translation and higher used equipment sales driven by increased operating lease maturities and early payoffs.
Financial Services recorded a net loss of $77 million, compared with net income of $47 million in Q3/25. The results primarily reflected the $156 million non-cash valuation allowance charge against deferred tax assets in Brazil, unfavorable currency translation impacts and lower volumes in South America and North America, partially offset by lower risk costs in South America. Adjusted net income, which excludes the charge, increased to $79 million from $46 million in Q3/25.
Retail loan originations were $2.48 billion, compared with $2.66 billion in Q3/25. The managed portfolio, including unconsolidated joint ventures, was $27.8 billion as of Sept. 30 (70% retail and 30% wholesale), down $0.7 billion from Sept. 30, 2025, and also down $0.7 billion on a constant currency basis.
The receivable balance more than 30 days past due was 4.1% of receivables as of Sept. 30, compared with 3.5% a year earlier, due to economic factors impacting farmers, specifically in South America.
Nine months
For the nine months ended Sept. 30, net income was $186 million, compared with $416 million a year earlier, and diluted EPS was $0.14, compared with $0.34. Adjusted net income was $387 million, compared with $457 million, and adjusted diluted EPS was $0.30, compared with $0.36.
Consolidated revenues were $12.98 billion, compared with $12.94 billion. Adjusted EBIT of Industrial Activities decreased 24% to $324 million, and the margin was 2.9%, compared with 3.9%. Cash flow provided by operating activities was $866 million, compared with $1.59 billion, and free cash flow used in Industrial Activities was $449 million, compared with $304 million.
Outlook
CNH is in the process of applying for and receiving refunds of IEEPA tariffs previously paid. The refunds are being recognized as received, and the company said it will reinvest nearly all of them into selective and time-limited priorities to accelerate its transformation.
CNH forecasts a full-year net refund benefit of $5 million in Agriculture ($32 million in Q3/26) after reinvesting in some discretionary programs:
- About $70 million in gross refunds ($62 million in Q3/26)
- About $50 million reinvested in one-off efforts to clear aged and discontinued equipment inventories ($25 million in Q3/26)
- About $15 million for accelerating a precision technology R&D capacity increase ($5 million in Q3/26)
It forecasts a full-year net refund benefit of $30 million in Construction ($39 million in Q3/26):
- About $50 million in gross refunds ($47 million in Q3/26)
- About $20 million reinvested in discretionary programs to promote connected equipment and to clear aged inventories ($8 million in Q3/26)
In addition to reinvesting tariff refunds, CNH said it continues to execute a disciplined operating strategy in response to challenging market conditions and an uncertain 2027 outlook. The company said it remains focused on maintaining appropriate production levels, reducing channel inventory in partnership with dealers, improving cost efficiency and responding proactively to changes in global trade policies. As the agriculture industry approaches the end of its cyclical trough, CNH said it is positioning the business for the eventual recovery through supply chain and manufacturing preparedness. It expects the combined effect of tariff refunds, associated reinvestments and prevailing market conditions to have a modest net impact on its previously communicated guidance ranges.
CNH updated its 2026 outlook as follows:
- Agriculture segment net sales about flat year over year, including positive 2% currency translation effects (unchanged)
- Agriculture segment adjusted EBIT margin between 5.1% and 5.4% (previously between 5.0% and 5.5%)
- Construction segment net sales up 8% to 10% year over year, including positive 1% currency translation effects (previously up 5% to 10%, with 2% currency translation)
- Construction segment adjusted EBIT margin between 2.0% and 2.3% (previously between 1.8% and 2.3%)
- Free cash flow of Industrial Activities between $300 million and $450 million (previously between $200 million and $400 million)
- Adjusted diluted EPS between $0.44 and $0.48 (previously between $0.41 and $0.46)
CNH reports quarterly and annual consolidated financial results under U.S. GAAP and annual consolidated financial results under EU-IFRS. Adjusted measures are non-GAAP financial measures; reconciliations to the most comparable GAAP measures are in the company’s release. The company said it is unable to provide a reconciliation for the 2026 free cash flow and adjusted diluted EPS guidance without unreasonable effort because of the uncertainty and difficulty of predicting the adjustments.
