AGCO's Mixed Harvest: Sales Slip And Earnings Miss Mark, Company Eyes Cautious Growth In 2024

AGCO Corp AGCO reported fourth-quarter fiscal 2023 net sales decline of 2.5% year-over-year to $3.80 billion, missing the consensus of $4.03 billion.

Regional Sales: South America -38.9% Y/Y, Europe/Middle East +3.3% Y/Y, North America +3.8% Y/Y and Asia/Pacific/Africa +11.3% Y/Y.

The adjusted operating income slid 13.2% Y/Y to $405.3 million, and the margin contracted by 133 bps to 10.7%.

The company reported regional operating margin performance with EME at 16.2%, North America at 9.0%, South America at 3.8%, and APA at 8.0%.

Adjusted EPS of $3.78, down from $4.47 a year ago, missing the consensus of $4.02.

As of December 31, 2023, cash and equivalents stood at $595.5 million.

“For 2024, we will remain focused on our primary growth initiatives as well as driving further operational efficiencies. We expect these efforts to mitigate some of the softening industry demand. More challenging global market conditions are expected in 2024 due to reduced commodity prices and modestly lower farm income expectations,” commented Eric Hansotia, AGCO’s Chairman, President, and Chief Executive Officer.

2024 Outlook: The agricultural machinery maker expects net sales of $13.6 billion versus the $13.54 billion consensus, reflecting lower sales volumes, modest positive pricing, and favorable foreign currency translation.

AGCO sees EPS of ~$13.15 versus $12.91 consensus; Operating margins are projected to be ~11%.

Price Action: AGCO shares are trading higher by 2.85% at $124.38 on the last check Tuesday.