CNH Industrial reported higher revenue in the second quarter of 2026, but weaker agricultural equipment demand, tariffs and rising operating expenses pushed earnings well below the prior-year level.
For the three months ended June 30, CNH generated consolidated revenue of $4.80 billion, up 2% from $4.71 billion in the same quarter of 2025. Net sales from Industrial Activities increased 3% to $4.14 billion.
The revenue improvement did not translate into stronger profitability. CNH reported net income of $141 million, down 35% from $217 million a year earlier. Diluted earnings per share declined from $0.17 to $0.11.
Adjusted net income fell 25% to $161 million, while adjusted diluted earnings per share decreased to $0.13 from $0.17. Adjusted EBIT from Industrial Activities declined to $167 million from $224 million, reducing the adjusted EBIT margin from 5.6% to 4.0%.
CNH generated $145 million in operating cash flow during the quarter. Free cash flow from Industrial Activities totaled $150 million, compared with $451 million in Q2 2025.
Agriculture Sales Hold Steady
Agriculture remained CNH’s largest business, generating $3.28 billion in second-quarter net sales. Reported sales increased 1%, although they were down 1% when measured at constant currency.
Favorable pricing helped offset weaker equipment volumes, particularly in South America. However, the segment’s adjusted EBIT dropped 35% from $263 million to $170 million. Its adjusted EBIT margin contracted from 8.1% to 5.2%.
CNH attributed the earnings decline to lower South American volumes, a less favorable product mix in North America and Europe, tariff costs, higher labor expenses, increased research and development spending and weaker results from joint ventures.
Research and development expenses represented 6.1% of agricultural sales during the quarter, compared with 6.0% one year earlier.
Tractor Demand Remains Weak
The agricultural machinery market continued to show substantial regional differences.
In North America, industry sales of tractors below 140 horsepower declined 16% year over year. Demand for tractors above 140 horsepower fell 17%, while combine sales were down 7%.
Across Europe, the Middle East and Africa, tractor demand decreased 11%, although combine demand was nearly stable with a decline of only 1%.
South American tractor sales fell 8%, while combine demand dropped 29%. Asia Pacific was the only region to record tractor market growth, with demand increasing 15%, but combine sales in the region fell 48%.
CNH CEO Gerrit Marx described the market as being near the bottom of the current agricultural equipment cycle. The company said dealer inventory levels are becoming more balanced, equipment fleets are continuing to age and the pricing gap between new and used machinery is moving toward more sustainable levels.
These factors could support replacement demand when farm economics begin to improve.
Construction Revenue Climbs 12%
CNH’s construction equipment business delivered much stronger sales growth than its agricultural operations.
Construction net sales increased 12% to $866 million, supported by higher North American volumes and the delivery of machines that had initially been delayed during the first quarter.
Global industry demand for heavy construction equipment increased 17%, while light equipment demand rose 6%. Total construction equipment demand increased in every major region, including 5% in North America, 9% in EMEA, 12% in South America and 16% in Asia Pacific.
Despite the higher sales volume, adjusted construction EBIT fell from $35 million to $15 million. The segment’s adjusted EBIT margin declined from 4.5% to 1.7%.
Tariffs and increased research and development spending were the primary pressures on profitability. Higher equipment volumes and lower selling, general and administrative expenses provided only a partial offset.
Financial Services Income Falls
CNH Financial Services generated quarterly revenue of $656 million, down 4% from $685 million in Q2 2025.
Net income declined 18% to $71 million due to margin compression, lower financing volumes in North America and South America, higher credit risk costs in Brazil and increased labor expenses.
The company’s managed financial portfolio stood at $28.0 billion as of June 30, 2026, down $700 million from the previous year. Retail financing accounted for 70% of the portfolio, while wholesale financing represented the remaining 30%.
Accounts more than 30 days past due increased to 4.4% of receivables, compared with 3.9% one year earlier. CNH connected the increase primarily to economic pressure on farmers in South America.
CNH Raises Outlook Range
CNH narrowed its full-year guidance toward the upper end of its previously announced ranges.
The company now expects agricultural net sales to remain approximately flat compared with 2025, including a positive currency translation effect of about 2%. The Agriculture segment is expected to produce an adjusted EBIT margin between 5.0% and 5.5%.
Construction net sales are projected to increase between 5% and 10%, including approximately 2% from currency translation. The expected adjusted EBIT margin for Construction is between 1.8% and 2.3%.
CNH forecasts full-year Industrial Activities free cash flow of $200 million to $400 million and adjusted diluted earnings per share of $0.41 to $0.46.
Revenue Growth Masks Margin Pressure
CNH’s second-quarter performance shows that equipment shipments and revenue are beginning to stabilize, but the company has not yet reached a meaningful earnings recovery.
Agriculture sales were essentially flat, yet the segment lost nearly three percentage points of adjusted EBIT margin. That difference is important because it shows how tariffs, product mix, labor expenses and continued technology investment are absorbing much of the benefit from pricing and improved sales execution.
Construction presents a similar picture. A 12% increase in sales would normally be expected to produce operating leverage, but adjusted EBIT fell by more than half. Until CNH can offset tariff expenses and convert higher production volumes into stronger margins, construction growth will contribute less to earnings than its revenue numbers suggest.
There are still reasons for cautious optimism. Dealer inventory normalization reduces the need for further aggressive production cuts. Aging machinery fleets cannot postpone replacement indefinitely, and a healthier relationship between new and used equipment prices could gradually restore demand.
CNH therefore appears to be positioning itself for the next replacement cycle rather than attempting to force short-term volume into a weak market. Maintaining research and development spending while profitability is under pressure carries risk, but cutting investment in precision agriculture, automation and machine technology could leave the company less competitive when equipment demand recovers.
About CNH
CNH is a global agricultural and construction equipment manufacturer whose principal brands include Case IH, New Holland Agriculture, New Holland Construction and CASE Construction Equipment. Its specialized and regional brands include STEYR, Raven, Hemisphere GNSS, Flexi-Coil, Miller and Eurocomach.
The company employs more than 35,000 people worldwide and operates across a history that extends for more than two centuries through its legacy equipment brands.
CNH reported full-year 2025 consolidated revenue of $18.10 billion, including $15.35 billion in net sales from Industrial Activities. Full-year 2025 net income totaled $505 million.
