CNH Industrial shares ended Monday up 10.9% after the farm and construction equipment maker reported third-quarter adjusted earnings of $0.16 a share, double the $0.08 recorded a year earlier and ahead of forecasts of about $0.10. The company also raised its full-year earnings guidance and confirmed a deal to place its construction business into a joint venture majority-owned by Kobelco.

Revenue for the three months ended 30 September 2026 was $4.35 billion, down about 1% from a year earlier and below the $4.52 billion analysts had expected. Reported net income fell 48% to $35 million, from $67 million, after a $156 million non-cash tax valuation allowance in Brazil. Adjusted net income, which excludes that charge, rose to $205 million from $109 million.

Margins, not volumes, drove the result

Adjusted earnings before interest and tax for industrial activities almost doubled to $202 million, lifting the margin to 5.5% from 2.8%. Agriculture revenue slipped 2% to $2.91 billion, yet adjusted earnings in the division rose 26% to $173 million. Construction revenue rose 5% to $777 million, with adjusted earnings jumping to $65 million from $14 million.

The quarter included $109 million of pre-tax tariff refunds, which flattered the result, and management said it reinvested part of that money in clearing older inventory and precision technology. Underlying farm demand remained weak: tractor sales under 140 horsepower fell 12% in North America, combines dropped 13%, and tractor volumes in South America sank 22%.

Guidance raised and Kobelco deal agreed

CNH lifted its 2026 adjusted earnings forecast to $0.44 to $0.48 a share, from $0.41 to $0.46. Under the Kobelco agreement, the construction equipment business becomes a joint venture in which Kobelco Construction Machinery holds a 70% stake, with the deal targeted to close by the end of 2027. Chief executive Gerrit Marx described the move as making CNH the biggest pure-play farm machinery manufacturer.

Analyst reaction was mixed but broadly supportive: Citigroup, Barclays and Baird raised their price targets after the results, while JPMorgan kept an underweight rating. The shares traded as high as $12.45 during Monday's session, having closed the previous session at $11.56.