AGCO Corp. (NYSE:AGCO) shares traded higher Thursday after the agricultural equipment maker reported third-quarter results, with adjusted earnings topping Wall Street expectations despite weaker sales and a reduced full-year outlook.
Adjusted EPS of $1.05 beat the 86 cents consensus estimate, while sales of $2.263 billion missed the $2.325 billion view.
Net sales fell 8.6% year over year, while diluted EPS fell to 75 cents from $4.09.
Profitability And Regional Performance
Operating income declined 23.4% to $116.1 million, while adjusted operating income fell 25.9% to $137 million.
Operating margin contracted to 5.1% from 6.1%, while adjusted operating margin fell to 6.1% from 7.5%.
North America sales rose 34.8% to $485.3 million, helped by higher unit sales across most equipment categories.
Operating income swung to $13.8 million from a $42 million loss, helped by higher sales and production volumes and about $13 million in tariff refunds.
Latin America sales fell 15.4%, Europe/Middle East declined 19.1%, and Asia/Pacific/Africa rose 13.8%.
Management Sees Industry Near Trough
CEO Eric Hansotia said on an earnings call Thursday that global demand is at its weakest level in more than a decade but said management still believes the industry is at the trough of the cycle, with some recovery expected in 2027.
“We are focused on what we can control: aligning production with retail demand, actively managing dealer inventories and taking structural costs out of the business,” Hansotia said.
AGCO cut third-quarter production 19% year over year and projects full-year production to decline about 5%. Industry tractor retail sales through September fell 9% in North America, 17% in Brazil and 1% in Western Europe.
Hansotia also highlighted retrofit technology as a way for farmers to adopt new capabilities without replacing machinery.
“PTX delivers retrofit-first, mixed-fleet technology, allowing farmers to adopt new capabilities without waiting for a machinery trade or development cycle,” he said.
Cash Flow And Shareholder Returns
AGCO used $218.4 million in operating cash through the first nine months of the year and recorded negative free cash flow of $380.6 million, while maintaining its full-year free cash flow target of about $300 million.
Cash and cash equivalents totaled $415.1 million at Sept. 30.
AGCO repurchased $57 million in shares during the quarter and $402 million year to date.
2026 Outlook
“Lower farm income and uncertainty across global agricultural markets continued to
weigh on farmer sentiment, with conditions softening further in EME and Latin America,” Hansotia said on the call.
AGCO lowered its 2026 adjusted EPS outlook to about $5.50 from $5.50-$5.75, compared with the Street’s $5.59 estimate.
The company lowered sales guidance to $9.8 billion-$10 billion from $10.1 billion-$10.2 billion, below the $10.176 billion consensus.
The company expects an adjusted operating margin of about 7%. Its 2026 estimates reflect tariff policies in effect as of Oct. 29, along with established mitigation actions and sourcing strategies
AGCO Price Action: AGCO shares were up 6% at $108.29 on Thursday, according to Benzinga Pro data.
Photo by T. Schneider via Shutterstock
Recent Comments