AGCO presents results for the second quarter of 2024

AGCO Corporation released its financial results for the second quarter of 2024, ending June 30. The company recorded a 15,1% drop in net sales, totaling US$3,2 billion compared to the same period in 2023. The reported net loss was US$4,92 per share, including the estimated loss on the sale of grain and protein business. Adjusted net income was $2,53 per share. In the second quarter of 2023, reported net income was $4,26 per share and adjusted net income was $4,29 per share.

In the first six months of 2024, net sales totaled approximately US$6,2 billion, a 13,7% drop compared to 2023. The reported net loss for the period was US$2,67 per share, also including the estimated loss on sale of grain and protein business. Adjusted net income was $4,85 per share. In the same period of 2023, reported net income was US$7,36 per share and adjusted net income was US$7,80 per share.

Eric Hansotia, president and CEO of AGCO, highlighted that weakened market conditions and significant production cuts influenced second-quarter results. Falling commodity prices and lower farm income projections in 2024 have negatively affected farmer sentiment, decreasing global demand for equipment. To face this scenario, AGCO implemented a restructuring program, with aggressive actions to control expenses, reduce production levels and investments in working capital.

Regional sales presented the following results in the second quarter:

• Europe/Middle East: drop of 4,4%

• North America: down 16,0%

• South America: drop of 41,7%

• Asia/Pacific/Africa: drop of 33,6%

In terms of regional operating margins:

• Europe/Middle East: 15,2%

• North America: 9,2%

• South America: 3,6%

• Asia/Pacific/Africa: 7,9%

Hansotia mentioned that crop production forecasts indicate healthy harvests in most agricultural regions, which has put pressure on commodity prices and farm income. Demand for precision technology is growing, but challenging economic conditions have resulted in weaker demand for equipment.

AGCO forecasts net sales of approximately $12,5 billion for 2024, including the positive impact of the PTx Trimble joint venture. Adjusted operating margins are expected to be approximately 9%. The company expects adjusted earnings per share of about $8,00.