CNH Global (CNH) is another company that has pulled guidance for 2009; this is a former fund holding (we held for agriculture exposure) with exposure to both agriculture & construction equipment - hence a good proxy for all things "production" so I like to keep my eye on it. It was down 35%+ yesterday on the results - I cannot reiterate enough how wrong many of these analyst estimates are - far too rosy and far too dependent on "2nd half 2009" recoveries that no one sees but the punditry. Anyone actually living outside the ivory tower of a Wall Street firm, and who has actually runs a company is in a completely different universe.
Farm and construction equipment
maker CNH Global NV (CNH) reported a lower-than-expected
quarterly profit on Thursday, hurt by a steep decline in
construction equipment sales, and warned of a turbulent 2009,
sending shares plunging 30 percent.
In an increasingly common corporate move, CNH did not provide an
EPS forecast for 2009. But it warned "we are
preparing for a turbulent 2009 and expect the first quarter to
be particularly challenging."
Ann Duignan, an analyst at JP Morgan, said the company's
unwillingness to forecast even near-term profits "highlights the
uncertainty for 2009." (shocker)
CNH said it expected the weakness in construction equipment
sales that dogged the industry in 2008 to continue into 2009 in
all major markets, including "significant declines in Western
European and Latin American markets." It also warned that the
many infrastructure investment projects being unveiled around
the world to pull local economies out of recession would do
little to increase demand for new equipment. "Although unprecedented
levels of governmental stimulus
actions are being enacted throughout the world, we expect that
such actions will have an impact in late 2009 or possibly into
2010, and may only serve as an offset to new declines in other
construction equipment market segments," CNH said in a
CNH said that agricultural fundamentals remained strong but
acknowledged that tight credit markets, and farmer uncertainty,
would weigh on sales even in the United States.