Shares of British construction and agricultural equipment manufacturer CNH Industrial (CNHI 0.26%) tumbled 8.7% through 10:30 a.m. ET on Tuesday after the company reported mixed financial results for Q3 2023. Shares of rival Deere (DE -0.18%) fell in sympathy on the news, down about 2.1%.

(Deere reports its own Q3 earnings on Nov. 22.)

Heading into Q3, analysts had forecast CNH would earn $0.43 per share on sales of $5.95 billion. In fact, CNH exceeded that revenue number, reporting $5.99 billion in sales. Earnings, however, fell $0.01 short of estimates at $0.42 per share (GAAP).

CNH sales and earnings

That's the bad news. The good news is that earnings were up by $0.01 from last year's Q3 earnings ($0.41 per share). Indeed, both revenues and earnings improved by about 2% year over year. Management also noted that it achieved "record margins" in its two big equipment divisions, with adjusted operating profit margins rising 50 basis points in agricultural equipment and 360 basis points in construction.

That latter number may be even more significant than it sounds. CNH noted that the improvement in agricultural margins lifted that segment's operating profit margin from 14.8% to 15.3%. The improvement in construction margins, on the other hand, more than doubled profitability, from 2.7% to 6.3%.

Granted, this still leaves the construction segment much less profitable, per dollar of revenue, than the agricultural segment. Relatively speaking, though, it's still a big improvement.

What comes next for CNH Industrial

Turning to guidance for a year that's more than three-quarters done (meaning that this guidance should be very accurate), CNH projects that sales for 2023 will be up 3% to 6% from last year. Adjusted earnings (which were equal to real, GAAP earnings in Q3) should be about $1.70 per share.

For a stock now trading per share in the mid-$10s range, this implies a current-year P/E of only about 6.2 -- for a stock that's paying its investors a 3.5% dividend yield. Even with minimal growth, this would seem an attractive valuation to me. And with analysts forecasting that CNH might actually grow its earnings at an average 7% or so over the next five years, the picture looks even brighter despite today's small earnings miss.

I think CNH is a buy.