CNH Sees Early Signs of Agriculture Recovery Despite Weak Second-Quarter Profit

Basildon, UK — CNH Industrial believes the global agricultural equipment market may be approaching a turning point despite reporting weaker profitability during the second quarter, as dealer inventories continue to normalize and machinery replacement demand gradually builds across key farming regions.

The manufacturer behind Case IH, New Holland Agriculture, and STEYR posted consolidated revenue of $4.8 billion for the quarter ended June 30, 2026, a 2% increase from the same period last year.

Industrial net sales rose 3% to $4.14 billion, reflecting resilient execution despite what the company describes as one of the lowest points in the current agricultural equipment cycle.

However, profitability remained under pressure. Net income declined 35% year-on-year to $141 million, while adjusted net income fell to $161 million as weak farm machinery demand, tariff impacts and rising operating costs continued to weigh on earnings.

CEO sees encouraging signs beneath the downturn

While acknowledging that farmers continue to face difficult economic conditions, CNH Chief Executive Officer Gerrit Marx said several industry indicators suggest the market is gradually stabilising.

“Our second quarter results reflect disciplined execution by the CNH team in a market that remains at the trough of the agriculture cycle,” Marx said.

He added:

“While farmer economics remain pressured, we are seeing constructive equipment-cycle indicators, including dealer inventory normalization, aging fleets, and a more balanced relationship between new and used equipment pricing.

We remain focused on supporting our dealers and customers today while investing in the iron and technology capabilities that will strengthen CNH through the next cycle.”

Those comments may prove to be the most significant takeaway from the quarter, suggesting management believes the industry’s prolonged slowdown could be nearing its bottom rather than deteriorating further.

Agriculture business remains resilient despite weaker margins

CNH’s Agriculture division generated $3.28 billion in net sales during the quarter, broadly unchanged from a year earlier.

Pricing remained favourable and helped offset lower shipment volumes, particularly in South America. Even so, adjusted operating profit dropped sharply to $170 million, down from $263 million a year ago, reducing the Agriculture segment’s adjusted EBIT margin from 8.1% to 5.2%.

The decline was attributed to several factors, including:

• weaker volumes in South America;
• less favourable product mix in North America and Europe;
• higher tariff-related costs;
• increased labour expenses;
• greater investment in research and development; and
• lower contributions from joint ventures.

Rather than aggressively chasing sales, CNH said it continues to manage production carefully while helping dealers reduce inventory levels throughout its distribution network.

Regional machinery demand tells a mixed story

The latest market data illustrates how uneven the global recovery remains.

During the second quarter:

• North American tractor demand fell 16% for machines under 140 horsepower and 17% for larger tractors, while combine demand declined 7%.
• Across Europe, the Middle East and Africa, tractor demand slipped 11%, although combine demand was almost unchanged, falling only 1%.
• South America experienced one of the steepest declines, with tractor demand down 8% and combine demand plunging 29%.
• Asia-Pacific presented the biggest contrast, where tractor demand increased 15%, even as combine demand dropped 48%.

The figures highlight how purchasing decisions remain highly crop- and region-specific rather than reflecting a uniform global trend.

Construction provides support

While agriculture remained subdued, CNH’s Construction segment delivered stronger revenue performance.

Construction equipment sales increased 12% to $866 million, driven largely by stronger North American shipments, including deliveries delayed from the first quarter.

Despite higher sales, adjusted EBIT declined from $35 million to $15 million, reflecting continued tariff costs and higher investment in research and development.

Outlook becomes more optimistic

Although management continues to describe 2026 as a trough year for agricultural equipment, CNH narrowed its full-year guidance toward the upper end of previously announced expectations.

The company now forecasts:

• Agriculture net sales to remain broadly flat year-on-year;
• Agriculture adjusted EBIT margin between 5.0% and 5.5%;
• Construction net sales growth of 5% to 10%;
• Construction adjusted EBIT margin between 1.8% and 2.3%;
• Industrial free cash flow of $200 million to $400 million; and
• adjusted diluted earnings per share of $0.41 to $0.46.

Agrimachinery Africa Analysis

The financial results tell only part of the story. More significant is what CNH’s management is signalling about the direction of the global machinery market.

Unlike earlier stages of the downturn, the company is no longer emphasising collapsing demand.

Instead, management repeatedly points to improving dealer inventories, aging machinery fleets and healthier pricing dynamics between new and used equipment. Those conditions have historically preceded the early stages of replacement-driven purchasing cycles.

For African agriculture, this shift deserves close attention.

Many commercial farms across Southern, Eastern and North Africa delayed major machinery investments during the period of elevated borrowing costs and softer commodity prices.

As financing conditions gradually improve and fleets continue to age, replacement demand could strengthen, particularly for tractors, combines and precision agriculture equipment.

However, the regional data also serves as a reminder that recovery will likely be uneven. Markets heavily dependent on grain exports and global commodity prices may rebound sooner than those facing continued financing constraints or weaker farm incomes.

For dealers across Africa, CNH’s emphasis on inventory discipline is equally notable.

Rather than flooding distribution channels with new machines, manufacturers appear increasingly focused on maintaining healthier stock levels—an approach that could improve pricing stability and reduce discounting once demand strengthens.

If CNH’s assessment proves accurate, 2026 may ultimately be remembered not as the year agricultural machinery markets recovered, but as the year the foundations for the next equipment replacement cycle quietly began to take shape.

Also Read

• AGCO Reports Strong North American Growth but Africa and Asia Remain Soft
• Why Farm Machinery Makers Are Turning Sustainability into a Profit Strategy