A maker of farm and construction machinery sold under brands like Case IH, New Holland Agriculture, and Steyr — the red and blue tractors and combines that work fields worldwide. Its name comes from a 1999 merger in which Fiat joined the Case Corporation and New Holland, whose initials spell "CNH"; Case traces to 1842 and New Holland to 1895. A fun chapter: the four-wheel-drive Steiger tractor began as a machine two Minnesota brothers built in a barn from salvaged truck parts.
Construction revenue rose 12% but tariff costs and Agriculture margin compression drove operating income down 37.5%.
returned to growth for the first time in six quarters, but profit continued to erode. Revenue rose 2.0% to $4.8 billion, yet fell 37.5% to $172 million as tariff-driven cost increases and an unfavorable sales mix in Agriculture more than offset the volume gains in Construction. The company is growing its top line again, but at a much lower margin than a year ago.
Key takeaways
fell 37.5% to $172 million, and narrowed 2.3 points to 3.6%, as tariff costs, lower production volumes, and higher and R&D expenses absorbed the benefit of a 2.0% increase.
Construction rose 12.0% to $866 million on higher North American volumes, providing the primary lift to consolidated revenue.
Agriculture edged up 0.9% to $3,277 million on favorable price realization, but dropped 35% to $170 million due to tariffs, an unfavorable South America mix, and higher and R&D.
Section summaries
Management's Discussion and Analysis
Q2 2026 revenue rose 2% to $4.8B driven by Construction, but net income fell 35% to $141M on tariff costs and lower Agriculture margins.
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Consolidated Q2 increased 2.0% to $4,803M, led by a 12.0% surge in Construction net sales to $866M on higher North American volumes.
narrowed 2.9 points to 29.3%, as cost of goods sold rose to 82.0% of from 79.4% a year ago, pressured by tariff costs and lower production volumes.
Financial Services declined 18% to $71 million, reflecting higher risk costs in Brazil, lower volumes, and .
for the first six months fell to $180 million from $934 million a year ago, driven by lower and unfavorable changes.
What changed
The Q1 2026 watch item for Agriculture margin was whether the 1.0% result represented a trough. In Q2, the margin improved to 5.2% of , but the $170 million in Adjusted EBIT was still down 35% , showing that tariff costs and mix headwinds continue to suppress profitability even as revenue stabilized.
The Q1 2026 watch item for Construction asked whether the Q1 loss was amplified by one-time trade show costs. In Q2, the returned to a profit, but the filing does not break out a discrete Adjusted EBIT figure for the quarter, and the segment's growth of 12.0% was the primary driver of the consolidated revenue increase.
The Financial Services over-30-day delinquency rate in Brazil, which reached 3.5% in Q3 2025 and persisted through Q1 2026, continued to pressure the , with higher risk costs in Brazil cited again as the reason for the 18% decline in .
The seasonal release that drove $772 million in in Q2 2025 did not materialize at the same scale; six-month operating cash flow fell to $180 million from $934 million a year ago, as lower and unfavorable working capital changes weighed on cash generation.
What to watch
Agriculture margin in Q3 2026, to see whether the 35% decline in Q2 represents the floor or whether further tariff cost pass-through and an unfavorable South America mix push the margin lower still.
Construction and profitability in Q3, to gauge whether the 12.0% North American volume growth in Q2 is sustainable and whether the segment can convert that growth into a meaningful profit contribution after the Q1 loss.
in Q3, to track whether the seasonal release that was largely absent in the first half materializes in the second half, or whether lower continues to suppress cash generation.
Financial Services over-30-day delinquency rate in Brazil, to see whether the 3.5% rate that has now persisted for multiple quarters begins to rise further, requiring additional credit loss provisions beyond those already pressuring the .
Agriculture edged up 0.9% to $3,277M on favorable price realization, but dropped 35% to $170M due to tariffs, unfavorable South America mix, and higher SG&A and R&D.
Cost of goods sold as a percentage of rose to 82.0% from 79.4%, pressured by tariff costs and lower production volumes.
Financial Services declined 18% to $71M, reflecting higher risk costs in Brazil, lower volumes, and .
Total available liquidity stood at $8,897M as of June 30, 2026, down $919M from year-end 2025, while the company expects to recover approximately $150M in IEEPA tariffs in future periods.
fell sharply to $180M for the six-month period from $934M a year ago, driven by lower and unfavorable changes.
Quantitative and Qualitative Disclosures About Market Risk
See "Part II, Item 7A Quantitative and Qualitative Disclosures about Market Risk" of our 2025 Annual Report. There has been no material change in this information.
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See "Part II, Item 7A Quantitative and Qualitative Disclosures about Market Risk" of our 2025 Annual Report. There has been no material change in this information.
There have been no material changes to the risk factors disclosed in our Annual Report on Form 10-K ( Part I, Item 1A) for the year ended December 31, 2025. The risks described in those reports, and in the "Safe Harbor Statement" within this report are not the only risks faced b…
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There have been no material changes to the risk factors disclosed in our Annual Report on Form 10-K ( Part I, Item 1A) for the year ended December 31, 2025. The risks described in those reports, and in the "Safe Harbor Statement" within this report are not the only risks faced by us. Additional risks and uncertainties not currently known, or that are currently judged to be immaterial, may also materially affect our business, financial condition or operating results.