MILAN (Reuters) -Italian-American vehicle maker CNH Industrial sounded a cautious note on its 2021 outlook on Thursday due to supply chain issues, after third quarter operating profit almost doubled led by strong demand for agricultural machinery.
The maker of farm machinery, construction equipment, Iveco commercial vehicles and powertrains, said its 2021 revenues were now seen at the lower end of the range it provided three months ago, indicating a rise of between 24-28%.
Chief Executive Scott Wine said the group was able to overcome an “increasingly challenging supply chain situation” in the third quarter, but added that “acute supplier issues” would constrain CNH’s results in the fourth quarter.
The group last month announced temporary shutdowns of plants in Europe due to disruptions in procurements and a shortage of core components, especially semiconductors.
Milan-listed shares in CNH Industrial reversed earlier gains after its results and were down 2.2% by 1305 GMT, the worst performer in Italy’s blue-chip index. Earlier in the session they hit an all-time high of 15.48 euros.
CNH also slightly trimmed its free cash flow forecast for the year to around $1.0 billion, after saying previously it would be in excess of that figure.
In the July-September period the group’s adjusted earnings before interest and tax (EBIT) of industrial activities rose to $469 million from $238 million a year earlier. That topped a $437 million forecast in an analyst poll compiled by Reuters.
Orders more than doubled year on year in the quarter both for tractors, in all regions, and for combines, especially in North America and Europe, CNH said.
Wine said the group’s ability to manage supply chain issues was even more remarkable as it devoted substantial energies to completing the $2.1 billion Raven Industries acquisition, announced earlier this year, and to finalising a planned spin-off, under the Iveco Group name, of its truck, bus and engine operations.
The separation plan remains on track for completion early in the first quarter of next year, he added.
After the spin-off CNH will focus on its agricultural machinery and construction equipment businesses.
Earlier this week CNH announced it had entered into a licensing agreement for electrification technologies with Monarch Tractor, a U.S company focused on fully-electric autonomous tractors.
(Reporting by Giulio Piovaccari, editing by Valentina Za and Susan Fenton)
