Industry Insight: CNH Sees Drop In Sales After Tariff Pressure Rise

The year 2025 has proved to be a difficult year for all the construction equipment manufacturers due to certain reasons.

The year has almost come to an end, and most of the OEMs have revealed their quarterly revenue. CNH Industrial has released its third-quarter sales performance, which is clearly on a downward trend. For the majority of OEMs, one of the main causes of the decline in sales has been tariffs. 

Sales of CNH Industrial alone have dropped by a significant 7%. Construction equipment defied the general slowdown by reporting an 8% increase in sales to $739 million. 

How did the profit trend overshadow

For CNH’s construction business, profitability remained a top concern despite increasing sales. Just $14 million was the result of a 59% decline in adjusted earnings before interest and taxes. The company ascribed this decline to a number of interrelated issues, such as rising tariff-related costs, an unfavorable regional sales mix, and an extra $12 million in increased SG&A expenses. Though not enough to completely offset the pressure, a $16 million positive boost from stronger price realization helped to mitigate these setbacks.

The company has been more aggressive with price adjustments than its competitors, according to CFO Jim Nickolas during the earnings call, just because tariff exposure required it. This was in spite of a $14 million increase in production costs and a $5 million negative impact from lower volume and mix in the third quarter. 

Did the decline in sales have an impact on the agricultural sector?

The challenging environment in agricultural machinery was reflected in CNH’s overall quarterly results. Adjusted earnings from this division fell 59% to $137 million, while sales of farm equipment fell 10% year over year to just under $3 billion. The decline was primarily caused by lower demand and fewer shipments in the United States, though the impact was somewhat mitigated by stronger pricing.

Since agriculture has always been the company’s main source of income, this downturn overshadowed the advancements in heavy construction equipment for sale. During the quarter, net income dropped by 78% to $67 million, while consolidated revenues decreased 5% to $4.4 billion. 

The company now depends significantly on its construction division to help stabilize performance during times of farm machinery market volatility, as these figures demonstrate.

What are the expectations for the upcoming year, 2026?

Tariff exposure continues to be the biggest risk factor for CNH going forward. The business updated its full-year sales forecast, predicting that net sales in the construction and agricultural sectors would decline by three to five percent and eleven to thirteen percent, respectively, at the end of the year. CNH is expected to lose between $205 million and $225 million this year as a result of increased U.S. steel and aluminum tariffs, particularly following the expansions announced in August. The cost of tariff-related expenses could range from sixty to seventy million dollars for construction equipment alone.

CNH has been developing a number of mitigation techniques to deal with these pressures, such as reevaluating supply chains, changing sourcing whenever feasible, and modifying equipment prices in North America. Although some of the cost burden will still be passed on to customers, the company stated that it plans to completely offset tariff impacts through additional measures. Since CNH lowered its production footprint this year and completed plans to close its assembly plant in Burlington, Iowa, lean manufacturing initiatives and strategic cost-cutting efforts are also in progress.

Don’t forget to subscribe to our YouTube channel for more equipment offers and insights into the industry.