British equipment manufacturer CNH Industrial (NYSE:CNHI)'s shares experienced a significant 10% drop following the company's mixed Q3 results on Tuesday. The fallout also led to a 2.1% decline in shares of competitor Deere (NYSE:DE). Despite exceeding revenue expectations with $5.99 billion in sales, CNH's earnings per share fell $0.01 short of the anticipated $0.43, albeit slightly higher than Q3 of the previous year at $0.41 per share.
The company reported "record margins" in its agricultural and construction sectors, both witnessing a 50 basis point increase in adjusted operating profit margins. This resulted in the agricultural segment's operating profit margin rising from 14.8% to 15.3%, and more than doubling the construction segment's profitability from 2.7% to 6.3%.
Currently, with shares trading in the mid-$10s range and a 3.5% dividend yield, CNH is forecasting a sales growth of 3-6% for 2023 and adjusted earnings of around $1.70 per share, which implies a P/E ratio of approximately 6.2.
Despite the slight shortfall in earnings, analysts are projecting an average growth rate of roughly 7% over the next five years.
InvestingPro Insights
Delving into real-time data from InvestingPro, CNH Industrial operates with a market cap of $13.55 billion and has a P/E ratio of 5.89, which aligns with the P/E ratio mentioned in the article. This low P/E ratio is indicative of the company's value investment status, as it's trading at a low earnings multiple, another InvestingPro insight. The company's revenue growth over the last twelve months as of Q2 2023 is 18.04%, which is noteworthy as it underscores the company's strong performance despite market volatility.
Turning to InvestingPro Tips, CNH Industrial is a prominent player in the Machinery industry, consistently increasing its earnings per share. This is in line with the article's mention of the company's earnings growth. Additionally, the company has raised its dividend for 3 consecutive years, which is relevant for dividend-focused investors and aligns with the dividend yield mentioned in the article. It's worth noting that there are 10 more InvestingPro Tips available for CNH Industrial, offering a broader perspective on the company's financial health and market position.
For a more comprehensive understanding of CNH Industrial's performance and potential, consider exploring InvestingPro's additional tips. These insights offer valuable guidance to investors, helping them make informed decisions.
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