AGCO Corp Earnings Surpasses Estimates in Q1, Shares Rise 11%

Shares of AGCO Corp. AGCO have gained 11% since it surpassed both top and bottom line estimates on  May 1. The company delivered an adjusted EPS of 41 cents in first-quarter 2025 compared with the prior-year quarter’s $2.32. The reported figure topped the Zacks Consensus Estimate of 3 cents.

Including one-time items, AGCO posted an EPS of 14 cents compared with the year-ago quarter’s $2.25.

Net sales decreased 30% year over year to $2.05 billion in the March-end quarter. The top line beat the Zacks Consensus Estimate of $2.02 billion. Excluding the unfavorable currency-translation impacts of 2.4%, net sales fell 27.6% year over year. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)

AGCO Corp’s Q1 Margins Down Y/Y

Cost of sales decreased 29.1% year over year to $1.53 billion in the first quarter. Gross profit decreased 32.4% year over year to $521 million in the reported quarter. The gross margin was 25.4% compared with the prior-year quarter’s 26.3%.

Selling, general and administrative expenses were $326 million compared with the year-ago quarter’s $350 million. Adjusted income from operations fell 70.3% year over year to $83 million. The operating margin was 4.1% compared with the year-earlier quarter’s 9.6%

AGCO’s Q1 Segmental Performance

Sales in the North America segment moved down 34.2% year over year to $396 million in the first quarter. The reported figure missed our estimate of $422 million. The segment reported an operating loss of $19.8 million against the prior-year quarter’s operating profit $28.4 million. Our projection for the segment’s operating income was $13.4 million. The decline was due to lower sales and production volumes. 

Sales in the South America segment decreased 15.8% year over year to $230 million. We expected the segment’s net sales to be $136 million. The segment reported an operating income of $2 million compared with the prior-year quarter’s $12 million. Our estimate for the segment's operating income was $7.5 million. The downside was driven by lower sales, lower production volumes and negative pricing. 

The EME (Europe/Middle East) segment’s sales were $1.33 billion compared with $1.71 billion in the year-ago period driven by lower sales and production volumes. The reported figure beat our estimate of $1.32 billion. EME’s operating income was $154 million compared with the year-ago quarter’s $295 million. We predicted EME’s operating income to be $76 million. 

Sales in the Asia/Pacific segment were down 36% year over year to $94.5 million. We expected the segment’s sales to be $111 million. The segment reported an operating loss of $2.7 million against the prior-year quarter’s operating profit of $9 million. Our projection for the segment’s operating profit was $3.8 million.

AGCO Corp’s Cash Flow Update

AGCO Corp reported cash and cash equivalents of $563 million as of Mar 31, 2025, down from $613 million as of Dec 31, 2024. Net cash used in operating activities totaled $212 million in the quarter compared with $370 million in the year-ago quarter.

AGCO Reaffirms 2025 Guidance

AGCO expects net sales of $9.6 billion for 2025. The company anticipates lower sales volumes for 2025. It expects to negate tariff impacts with planned mitigation actions. Considering these, management projects an EPS of $4.00-$4.50 for 2025.

AGCO Corp. Stock’s Price Performance

The company’s shares have lost 16% in the past year against the industry’s growth of 14.1%.

AGCO’s Zacks Rank

AGCO currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.

AGCO Corp.’s Peer Performances

Lindsay Corporation LNN delivered earnings per share of $2.44 in second-quarter fiscal 2025 (ended Feb. 28, 2025), beating the Zacks Consensus Estimate of $1.89. The bottom line rose 49% year over year.

Lindsay generated sales of $187 million, up from $152 million in the year-ago quarter. The top line beat the Zacks Consensus Estimate of $180 million.

CNH Industrial N.V. CNH reported first-quarter 2025 adjusted earnings per share (EPS) of 10 cents, which declined from 33 cents in the prior-year quarter. The figure, however, surpassed the Zacks Consensus Estimate of 9 cents.

In the first quarter, CNH Industrial’s net sales declined nearly 21% from the year-ago level to $3.82 billion but topped the Zacks Consensus Estimate of $3.79 billion. The company’s net sales from industrial activities came in at $3.17 billion, down 23% due to lower shipment volumes.

Farm Equipment Stocks Awaiting Results

Deere & Company DE is expected to release its second-quarter fiscal 2025 results on May 15.

The Zacks Consensus Estimate for Deere’s earnings per share is pegged at $5.68 for the fiscal second quarter, implying a decline of 33.4% from the year-ago figure. The consensus estimate for Deere’s total sales is pinned at $10.7 billion, indicating a year-over-year decrease of 21%.

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This article originally published on Zacks Investment Research (zacks.com).

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