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May 5, 2026 by Kin Schmidt, Farm Equipment magazine Basildon, UK -- During CNH Industrial's Q1 earnings call on April 30, CEO Gerrit Marx said the OEM's first quarter results were as expected, noting that the first quarter is seasonally CNH's lowest quarter and "we are at historically low industry demand in North America, and farmers in Brazil have ongoing financial challenges." He also noted the additional complications that emerged during the quarter -- including changing tariff rules and war in Iran. "We are now passing through what we expect to be the lowest period of the current ag industry cycle, supported by some replacement demand," Marx said. "As we have said before, we also expect Q1 2026 to be the lowest quarter of the year, during which we diligently continued the disciplined management of all levers in our control." Marx also noted that dealer inventory levels remained unchanged since the beginning of the year, calling it "by design." "Normally, dealers build inventory in Q1 in preparation for Q2, but the flat levels are in line with our overall plan to have the dealers reduce their inventories by about $500 million this year," he said. Tariff Impacts James Nickolas, CFO, highlighted the changes in the way Section 22 tariffs on steel and aluminum were applied, effective in early April. "At a very simple level, it means we went from paying 50% on the value of only the metal to now paying anywhere from 0% to 50% on the total value of the component or machine, depending on what it is,' he said. "For whole machine imports, we are now paying 25% on the total value of the unit, which overall is higher than what we paid before. However, for some component imports, the tariffs can actually be lower." The change is net neutral for CNH's agriculture business for calendar year 2026, he said. As a result, the company is still forecasting tariff cost impact to be about 210 to 229 basis points of impact on ag margins, which he said is the same as last quarter. To read the entire article click here. Tweet |
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