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South American equipment sales to rise this year, CNH says...

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South American equipment sales will continue to buck a falling trend in global ag-machinery demand, CNH Industrial said.

The maker of Case and New Holland machinery expects sales in North America to fall in 2017, with relatively flat outcomes in Europe and Asia.

Since CNH was created in 2013, from a merger of CNH Global and Fiat Industrial, its global agricultural equipment sales have fallen by an average of 9.2% a year.

Fall in North American production

CNH expects North American agricultural equipment sales to decline in 2017, with the sharpest declines seen in heavier and more expensive equipment.

For North America, CNH expects flat sales of tractors below 140 horse power, while sales of higher horsepower tractors and combines are seen falling by 5 to 10%.

Sales of agricultural equipment in Europe are seen declining by around 5%, while sales in the Asia-Pacific region are seen fairly flat.

But for South America, CNH is expecting a robust recovery, with sales of both tractors and combine harvesters rising by some 15%.

Falling equipment sales

CNH's agricultural equipment sales fell by 8.2% in 2016.

The company ascribed the drop to "unfavourable industry volume and product mix in the row crop sector in North America, and in the small grain sector in Europe, the Middle East, and Africa.

But equipment sales in Latin America rose, thanks improvement in the Brazilian market, and positive currency effects.

In the last three months of 2016, Agricultural Equipment's net sales fell by 5.1% year-on-year, compared to the same time a year ago.

Operating profits in the agricultural segment were reported at $818m, down $134m compared to 2015.

Shares fall

Over the three months to December 31, CNH revenues fell 2.0% year-on-year, to $7.00bn, compared to the 6.79bn forecast by analysts.

The board recommended a dividend of E0.11 per share.

Quarterly adjusted net income came it at $197m, down from $262m a year ago.

Adjusted income per share came in at $0.07, missing analyst expectations, of $0.12.

CNH shares in London were down 1.8%, at E8.250 in afternoon deals.

By William Clarke

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