CNH Global hiked its hopes for the world farm equipment market as the maker of Case and New Holland tractors unveiled its first uptick in sales since autumn 2008.

The US-based group, which also unveiled a five-year strategic plan, said the global agricultural equipment sales would at worst prove flat this year, and could see 5% growth.

In January, CNH forecast the market would decline by 5-10%.

The revision followed a January-to-March quarter in which "improving market conditions" drove demand for agricultural equipment in the Americas ahead of forecasts.

"Demand in North America was firm, and Latin America strong, on stable commodity pricing," CNH said.

'Heavy competitive pricing'

The group acknowledged that, in tractors, it had failed to see the full advantage of the upturn, revealing a waning share of the North American market, particularly in the smaller horsepower segment.

In Latin American, "heavy competitive pricing" cost CNH share of the high-volume markets for smaller and medium-sized tractors.

However, the group had punched above its weight in combines, boosted a strategy of targeting key farmers in the US and introducing fresh models in Latin America, helping ensure the farm equipment division grew sales by 2.1% to $2.63bn in the quarter.

The group returned to the black with earnings of $16m, compared with a $126m loss a year before.

Earnings per share hit $0.16 at an underlying level, considerably ahead of Wall Street forecasts of a $0.02-a-share figure.

Cost cuts 

The results highlighted the impact of "a more stable market" and company efforts to improve efficiency which had cut 11% of the group's workforce last year, Harold Boyanovsky, the CNH chief executive, said.

"We have reduced structural costs and this is the main driver of our improved financial performance," he said.

The data was well received by analysts, with International Strategy & Investment Group terming it a "solid beat" and Bank of America Merrill Lynch lifting its forecast for CNH's earnings this year.