AGCO raises margins in Q2 2025

AGCO reported net revenue of $2,6 billion in the second quarter of 2025, a decrease of 18,8% compared to the same period last year. Despite the adverse scenario, the company expanded operating margins through production cuts, inventory reductions, and cost control. Adjusted net income per share was $1,35.

In Brazil, tractor sales grew 6% in the first half of the year, driven by smaller models. Even with a record soybean harvest, the market remained cautious about purchasing large machines. Sprayers and medium-sized tractors saw a decline. Even so, AGCO improved its operating margin in South America to 7,8%, driven by improved manufacturing efficiency and product mix. Revenue in the region fell 4,7% in the quarter.

Brazil's performance contrasted with sharper declines in other regions. In North America, sales fell 32,2%, with a sharp decline in demand for high-horsepower tractors, sprayers, and hay equipment. The margin was negative at 5,3%. In Europe and the Middle East, sales fell 11,2%, with losses concentrated in Western Europe. The margin was 14,7%. The Asia-Pacific and Africa region saw a 5,9% decline.

Global revenue in the first six months of 2025 totaled US$4,7 billion, down 24,1% from the same period in 2024. The real decline, excluding the sale of the Grain & Protein segment, was 24,8%. Adjusted net income per share for the half-year was US$1,76, down from US$4,85 a year earlier.

CEO Eric Hansotia highlighted the strong performance of AGCO's premium brands, supported by the growing demand for precision agriculture solutions. Technological tools that increase efficiency without requiring significant investment have attracted producers, especially in tight margin environments.

In the United States, tractor sales fell 13% in the first half of the year. Combine harvesters fell 33%. In Western Europe, the decline was 12%, with the exception of Spain and Italy. The company believes demand will remain weak in 2025, but sees opportunities in the advancement of sustainable and adaptive technologies.

Despite the downturn, AGCO revised its 2025 sales projection upward, now estimated at $9,8 billion. Adjusted earnings per share are expected to range from $4,75 to $5,00. The company also announced a share buyback program worth up to $1 billion.

The strategy remains focused on strengthening digital agriculture, through the PTx Trimble joint venture, with a focus on smart and sustainable solutions for producers.