January 30, 2018 / 5:50 PM / 2 years ago

UPDATE 1-CNH Industrial reports weaker profit margins in Q4

(Adds details from the conference call, shares update, trader comment)

MILAN, Jan 30 (Reuters) - Trucks and tractor maker CNH Industrial reported a drop in operating profit margins for its industrial activities in the fourth quarter despite a 17 percent jump in sales.

The group, created from the merger of Fiat Industrial and its U.S. unit CNH, said operating profit for its industrial activities rose nearly 14 percent to $468 million, but margins fell to 6 percent from 6.2 percent a year earlier.

“Our full year results were better than our upgraded guidance, with demand increased in all four of our businesses”, CNH Industrial CEO Richard Tobin told an analyst call.

Tobin said careful control of the group’s working capital had allowed CNH to close the year with $0.9 billion in net industrial debt, “meaningfully” exceeding its target.

For 2018, CNH Industrial expects sales from industrial activities, encompassing its four business, of between $27-28 billion and a 30 percent rise in adjusted diluted earnings per share to between $0.63-0.67.

The net industrial debt is seen at between $0.8-1.0 billion.

A Milan-based trader said that 2018 targets for sales and net debt were slightly ahead of expectations, while the adjusted EPS was slightly disappointing.

CNH Industrial plans to pay out a dividend of 0.14 euros per share, up 27 percent from the previous year, and to launch a buyback programme for up to $700 million.

Milan-listed shares in the company closed down 2.34 percent at 11.915 euros, underperforming a 1.4 percent drop in Italy’s blue-chip stock index. (Reporting by Elisa Anzolin; Editing by Alison Williams)

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