Negative economic conditions continue to pull CNH down in the second quarter of 2009. Equipment Operations generated positive cash flow through inventory reductions of $668 million, contributing to a reduction of Equipment Operations net debt by $550 million. Second quarter 2009 net loss attributable to CNH was $67 million, compared with net income of $347 million in the second quarter of 2008.
Worldwide agricultural tractor and combine industry retail unit sales declined 11% in the second quarter and 7% for the first half of 2009, driving Agricultural Equipment division's net sales down 22% for the quarter and 17% for the first half compared with 2008.
Second Quarter 2009 Brand Activities
Case IH Agriculture launched three new models of its Farmall line of compact tractors with continuously variable transmissions (CVT) and the Austoft entry level sugar cane harvester.
New Holland Agriculture's new line of large and small square balers, launched in North America in the first quarter, became fully available. New Holland also launched the new Class 9, 500+ hp Combine (CR9080) in North America and Australia. It also invested for the third quarter launch of its new flagship T7000 series tractors (167hp to 225 hp) with continuously variable "Auto Command" transmissions and new armrest control console in North America and Western Europe.
Case Construction continued its roll out of CX crawler excavators with a new CX 130B "long reach" model, with joystick steering for increased operator efficiency and comfort.
New Holland Construction added several new features to its North American crawler excavators to increase product applicability and protection for ground level demolition activities.
For the 2009 outlook, CNH anticipates that cash grain commodity prices will remain at higher levels than in 2007 while farm production input cost pressures will abate. They expect worldwide industry retail unit sales of over-40 hp tractors to be down by 10% to 15% and industry retail unit sales of combines to be down 25% to 30%, with both sectors weaker than previously anticipated. They also expect further weakness in the under-40 hp tractor segment in North America with industry retail unit sales down approximately 25%, as the weakness in the North American residential construction and housing markets continues.
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