CNH Reports Lower Net Sales

CNH Global, Burr Ridge, IL, said their 2009 financial results saw net sales declining by 26% to $12,783 million for the full year. Dealing with the downturn, the company said it put in place tight cost controls which delivered an operating profit of $373 million from equipment operations for the full year, which was down 75% from the same period in 2008.

The volume decline combined with the drive to reduce inventories, were the primary factors in the decrease in operating profit from equipment operations, the company said. CNH drove down costs in 2009, including an 18% reduction in business expenses for equipment operations. The company said it reduced its overall workforce by 13% and cut other operating costs.

CNH said equipment operations generated $1.1 billion in cash from operating activities over 2009. The company exceeded its working capital reduction target for the full year, delivering $1.2 billion in cash flows through strict management of working capital, centered around a $1.4 billion reduction of inventory.

CNH equipment operations improved its net cash position by $953 million, ending the year with a net cash position of $530 million, compared to a net debt position of $423 million at the same time a year earlier. The net loss attributable to CNH was $190 million in 2009, compared with net income of $825 million in 2008. These results include after tax restructuring charges of $75 million, compared to $28 million in 2008.

CNH’s 2010 outlook is for global agriculture markets to decline approximately 5% to 10%. CNH’s outlook also calls for construction equipment markets globally to increase approximately 5% to 10% during 2010.