AGCO raises outlook for 2017 after positive second quarter reports

AGCO, a worldwide manufacturer and distributor of agricultural equipment, reported net sales of approximately US$2.2bn for the second quarter of 2017, an increase of approximately 8.5 per cent compared to the second quarter of 2016

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Reported net income was US$1.14 per share for the second quarter of 2017, and adjusted net income, excluding restructuring expenses, was US$1.15 per share. These results compare to reported net income of US$0.61 per share and adjusted net income, excluding restructuring expenses and a non-cash deferred income tax adjustment, of US$1.02 per share for the second quarter of 2016. Excluding unfavorable currency translation impacts of approximately 2.0 per cent, net sales in the second quarter of 2017 increased approximately 10.5 per cent compared to the second quarter of 2016. 

Net sales for the first six months of 2017 were approximately US$3.8bn, an increase of approximately 6.7 per cent compared to the same period in 2016. Excluding unfavorable currency translation impacts of approximately 1.5 per cent, net sales for the first six months of 2017 increased approximately 8.2 per cent compared to the same period in 2016. For the first six months of 2017, reported net income was US$1.02 per share and adjusted net income, excluding restructuring expenses and a non-cash expense related to waived stock compensation, was US$1.13 per share. These results compare to reported net income of US$0.70 per share and adjusted net income, excluding restructuring expenses and a non-cash deferred income tax adjustment, of US$1.12 per share for the first six months of 2016. 

“AGCO achieved sales and earnings improvement in the second quarter in the midst of challenging market conditions,” stated Martin Richenhagen, AGCO’s Chairman, President and Chief Executive Officer. “Higher demand and margins in our Europe/Middle East region are driving our improved results and increased outlook for the full year. AGCO’s sales and earnings growth also reflect the benefit of our efforts to reduce expenses, improve the efficiency of our factories and launch new products. While there continues to be a weakness in our key markets, we will remain focused on improving our competitive position and expanding our margins by investing in new technologies, productivity enhancements, and new market development.”

Net sales in AGCO’s Asia/Pacific/Africa region, excluding the negative impact of currency translation, increased 28.6 per cent in the first six months of 2017 compared to the same period in 2016 due primarily to increased sales in China and Australia. Income from operations improved approximately US$6.5mn in the first six months of 2017, compared to the same period in 2016, due to higher sales and production levels.