By Tim Todd


KANSAS CITY (B)--Construction and farm equipment giant CNH Global reported a first-quarter net loss of $37 million before one-time charges May 3. The figure is relatively even with a year ago on a pro forma basis.

The company formed last November through the merger of Case Corp. and New Holland N.V. said it lost 25 cents per share not including goodwill and restructuring. Including the impact of goodwill, the company had a net first-quarter loss before the restructuring of $54 million, or 36 cents per share. The consensus estimate of analysts polled by First Call Corp. was a loss of 36 cents per share.

"Pretty much in line," said Barry Bannister, an analyst with Legg Mason.

Revenues for the quarter were $2.6 billion, which the company said was comparable with the same period a year ago on a pro forma basis. Unfavorable foreign exchange rates negatively affected first-quarter sales by $85 million compared with 1999, the company said.

"Our operating performance exceeded expectations for the quarter despite the impact of higher interest rates and unfavorable foreign exchange," Chief Executive Jean-Pierre Rosso said in the earnings release. "Our integration process is proceeding ahead of plan, and we now expect to realize increased synergies this year."

The company said rising interest rates and unfavorable foreign exchange are expected to reduce earnings in 2000 from the company's prior expectations. However, the company said increased production and greater merger synergy savings are anticipated to result in stronger overall operating performance for this year compared with 1999 on a pro forma basis.

CNH said it expects second-quarter earnings to be comparable with year-ago numbers on a pro forma basis.

Because of the merger-related issues, analysts said the specific earnings figures released Wednesday morning were perhaps not as crucial as they will be a year from now.

"I don't think the numbers across the tape are meaningful in any way," said Lisa Shalett, an analyst with Bernstein.

Shalett said CNH management indicated during an analysts-only conference call that the company is meeting or exceeding its own expectations in areas such as the merger integration.

In its earnings release, the company said it expects full-year synergy savings of $150 million and at least $500 million by 2003.

"From an operating perspective, things appear to be on track," Shalett said.

In its earnings release, CNH said construction equipment sales were up worldwide during the quarter compared with the combined performance of the then separate companies a year ago.

Agricultural equipment retail sales trailed year-ago numbers during the quarter, but the declines were not as substantial as industry-wide figure s, CNH said. The company also said that its market share in "nearly every major market around the world" increased during the quarter.

Looking ahead, the equipment maker said its outlook remains unchanged for both farm and construction equipment. Rising interest rates and unfavorable foreign exchange, however, are adversely affecting the company's equipment and financial services operations, CNH said.

The company said it expects worldwide sales of agricultural equipment to be moderately lower than in 1999, particularly in high horsepower tractors and combines.

In its construction equipment business, CNH said markets continue to appear stable, with North American demand seen as slightly lower than 1999 levels. In Europe, the company said it expects the sales outlook to remain slightly above year-ago markets. In Latin America and other markets, the company said it expects significant sales improvement compared with relatively low levels in 1999.

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