AGCO Reports Sharp Sales Decline, Reaffirms 2025 Outlook With Strategy To Weather Market Challenges

AGCO Corp AGCO shares slipped after the company reported mixed fourth-quarter results and reaffirmed its 2025 outlook.

AGCO reported a 24% year-over-year decline in fourth-quarter net sales to $2.887 billion, missing the consensus of $3.164 billion.

Gross margin slipped 29.9% YoY to $688.7 million and margin contracted by 200 bps YoY to 23.9%. Adjusted operating income slid 30% year over year to $285.3 million and the margin contracted by 80 bps to 9.9%.

Regional Sales: South America -31.6% YoY, Europe/Middle East -16.7% YoY, North America -38.7% YoY and Asia/Pacific/Africa -26.2% YoY.

The company reported regional operating margin performance with EME at 14.4%, North America at 0.7%, South America at 10.8% and APA at 3%.

Adjusted EPS of $1.97, down from $3.78 a year ago, beating the consensus of $1.82.

AGCO's cash provided by operating activities for the fiscal 2024 totaled $689.9 million, down from $1.103 billion a year ago. As of December 31, cash and equivalents stood at $612.7 million.

"In 2025, we will continue to execute our Farmer-First strategy strengthened by the portfolio moves and aggressive cost control actions, including our ongoing restructuring program. We expect these efforts to dampen the impact of further weakening industry demand, helping deliver adjusted operating margins well above levels achieved during prior industry troughs," commented Eric Hansotia, AGCO's chairman, president and CEO.

"We will continue our investments in premium technology, smart farming solutions and enhanced digital capabilities to support our Farmer-First strategy to better position the company for success when the industry recovers while helping to sustainably feed the world," added Hansotia.

2025 Outlook reaffirmed: AGCO continues to expect Adj. EPS of $4.00-$4.50 versus the consensus of $7.37 and net Sales of ~$9.6 billion versus the consensus of $11.96 billion.

The company expects Adjusted operating margins to be approximately 7% – 7.5%, reflecting the impact of lower sales, lower production volumes, increased cost controls and moderately lower investments in engineering.

Hansotia noted that global agricultural markets face uncertainty due to fluctuating crop prices, high input costs, and geopolitical instability. Equipment demand remains weak despite the rising adoption of precision technology, driven by challenging farm economics.

Price Action: AGCO shares are trading lower by 2.03% at $101.2 premarket at the last check Thursday.

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