CNH Global (CNH) - Tough Year Ahead

Remember our call from a month ago was that this earnings season we would see a lot of pulled guidance as so few have visibility - it is happening everywhere; even Microsoft (MSFT) has apparently pulled guidance for 2009. (can't find a link quickly to confirm it) Again, it is almost humorous to watch these analysts and pundits show up in financial media so sure about "turns" and "bottomings" when the company CEOs are saying they are completely blind. I am trying to figure out if the punditry actually believes what they say, or realize they have to "paint a nice picture" to continue trying to attract assets - I mean is it negligence or more of a used car salesman tactics (hey everything's fine, cmon in!)

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
  statement.

• Robert McCarthy, an analyst at Robert W. Baird, called CNH's
  outlook "abysmal" and said it had negative implications for 
  everyone from Caterpillar Inc (CAT.N) to Deere & Co (DE.N).
  

• 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.

No position