CNH Industrial posts smaller-than-expected loss in second quarter

MILAN (Reuters) - Vehicle and equipment maker CNH Industrial CNHI.MI posted a narrower-than-expected second quarter loss on Thursday and said the market was recovering more quickly than anticipated from the COVID-19 pandemic.

FILE PHOTO: A CNH Industrial building is pictured in Turin, Italy, February 5, 2020. REUTERS/ Massimo Pinca

Acting Chief Executive Suzanne Heywood said the group had all its plants and depots back up and running by May.

“This meant that we were well positioned to supply products into end-markets that strengthened ahead of expectations, enabling us to deliver better than expected business performance with modest free cash flow generation,” she said in a statement.

CNH, which is controlled by Exor EXOR.MI, the holding company of Italy's Agnelli family, said its industrial activities made an adjusted loss before interest and tax of $58 million (44.6 million pounds) (EBIT) in the April-June period.

That compares to a forecast for a $221 million loss from an analyst poll compiled by Reuters.

CNH shares closed down 1.9%, having fallen more than 4% before results were released.

Heywood told analysts that a 24% decline at constant currencies in second-quarter sales from its industrial activities was lower than anticipated at the end of the previous quarter.

“Some markets are coming back relatively strongly, including low horsepower tractors in North America,... combines in North and South America and light commercial vehicles in Europe toward the end of the quarter,” she said.

The maker of farm machinery, Iveco commercial vehicles, construction equipment and powertrains forecast net sales from its industrial activities would fall between 15% and 20% this year.

Net debt stood a $2.3 billion at end-June, broadly unchanged during the quarter thanks to a number of cash-preservation measures and a positive free cash flow of $97 million, it said

However the group said free cash flow from its industrial operations was expected to remain negative for the full year despite expected cash generation in the second half.

Available liquidity amounted to $11.5 billion at the end of the second quarter.

Reporting by Giulio Piovaccari; editing by James Mackenzie, Emelia Sithole-Matarise and Jan Harvey