CNH Industrial N.V. (NYSE: CNH) shares jumped nearly 14% on Monday after the agricultural and construction equipment maker reported second-quarter results that beat Wall Street estimates and raised its full-year earnings outlook.

Adjusted earnings came in at 13 cents per share, above the analyst estimate of 10 cents. Revenue rose 2% year over year to $4.80 billion, topping the consensus estimate of $4.38 billion. Industrial Activities net sales increased 3% to $4.14 billion.

Earnings Beat Despite Lower Profit

GAAP net income fell to $141 million from $217 million a year earlier, while diluted earnings per share declined to 11 cents from 17 cents. Adjusted net income dropped 25% to $161 million, and adjusted EPS fell to 13 cents from 17 cents.

Industrial Activities adjusted EBIT declined 25% to $167 million. The adjusted EBIT margin narrowed 160 basis points to 4%.

Agriculture, Construction Face Cost Pressures

Agriculture net sales increased 1% to $3.28 billion as favorable pricing offset lower South American volumes. However, adjusted EBIT fell to $170 million from $263 million, and the margin narrowed to 5.2% from 8.1%.

Production hours declined 5%, while dealer inventory remained roughly flat. Adjusted gross margin fell 210 basis points to 19.7% as lower volumes, unfavorable product mix, tariffs, and higher labor and research and development costs weighed on results.

Construction net sales rose 12% to $866 million, helped by stronger North American demand and delayed first-quarter shipments. Adjusted EBIT declined to $15 million from $35 million, while the margin fell to 1.7% from 4.5%.

Production hours increased 15%, dealer inventory rose 1%, and adjusted gross margin declined 380 basis points to 11.9%, primarily due to tariffs and higher R&D spending.

CEO Gerrit Marx said farmer economics remain under pressure but pointed to improving industry fundamentals, including normalized dealer inventories, aging equipment fleets and a healthier balance between new and used equipment prices.

During the company's earnings call, CFO Jim Nicholas said CNH's operational improvements in pricing, sourcing and manufacturing are delivering as planned, but higher tariffs have prevented those gains from reaching shareholders.

He said much of the benefit has instead been absorbed by tariff costs, adding that if tariff rates remain stable, future price-cost improvements should increasingly flow to shareholders.

Outlook Raised As Tariff Impact Eases

Financial Services revenue declined 4% to $656 million, while net income fell to $71 million from $87 million. Retail originations totaled $2.53 billion, and the managed portfolio stood at $28 billion. Delinquencies of more than 30 days increased to 4.4% from 3.9%.

Operating cash flow totaled $145 million, while Industrial Activities generated free cash flow of $150 million. The company ended June with $1.87 billion in cash and cash equivalents and $25.97 billion in debt. It returned about $200 million to shareholders through dividends and share repurchases.

CNH lowered its estimated 2026 tariff impact to about 170 basis points for Agriculture and 470 basis points for Construction.

The company also raised its full-year adjusted EPS forecast to 41 cents to 46 cents from the prior range of 35 cents to 45 cents. The updated guidance brackets the analyst consensus estimate of 41 cents. CNH expects Industrial Activities free cash flow of $200 million to $400 million.

CNH Price Action: CNH Industrial shares were up 13.90% at $11.67 at the time of publication on Monday, according to market data.