CNH construction equipment sales drop –56%

CNH's construction equipment sales fell -56% in the third quarter of the year to US$ 506 million. The division made an operating loss of US$ 88 million, compared to a profit of US$ 42 million a year ago.

For the year to date, CNH's construction equipment sales are down -59% to US$ 1.53 billion, compared to US$ 3.77 billion for the first nine months of 2008. The first nine months of last year saw the division make a US$ 164 million operating profit, compared to the loss for 2009 to date of US$ 273 million.

A company statement said, "CNH continued to idle much of its construction equipment production capacity during the quarter to further reduce both dealer and company inventories, under-producing retail unit sales by 58%."

Commenting on the rest of the year, the statement added, "We expect global construction equipment industry retail unit sales to continue at levels close to those we experienced in the first nine months of the year, with full year industry retail unit sales down -40% to -45% compared with full year 2008, with light equipment markets down by -45% to -50% and heavy equipment markets declining by approximately -40%."

Despite difficult conditions in the construction equipment market, CNH made an overall operating profit of US$ 72 million for the quarter, thanks to a less dramatic reduction in its agricultural equipment sales. Total revenues came in at US£ 2.96 million, -32% lower than the same period last year.