AGCO’s North American sales drop 32% YoY in Q3

AGCO reported a steep drop in North American sales during the third quarter as high interest rates and weak commodity prices curbed farm equipment spending.

Regional net sales fell 32.1% from a year earlier to $383 million, with the sharpest declines in high-horsepower tractors, sprayers and combines, according to AGCO’s earnings release today. The segment posted a negative operating margin of 10.5%, reflecting lower production volumes and soft industry demand.

Overall, AGCO’s global net sales declined 4.7% to $2.5 billion, while reported earnings rose to $4.09 per share and adjusted earnings reached $1.35 per share, according to the release. The company raised its full-year adjusted earnings outlook to about $5.00 per share and plans $300 million in share repurchases in the fourth quarter using proceeds from the sale of its TAFE ownership stake.

North American farmers are facing tighter margins and weaker capital investment, although precision agriculture and autonomous technologies remain bright spots, AGCO President and Chief Executive Eric Hansotia said in the release.

“Our continued investments in precision agriculture, autonomous solutions and sustainable technologies helped maintain demand for our premium brands,” he said. “At the same time, we have responded decisively with disciplined production cuts, aggressive cost management, and accelerated strategic restructuring initiatives.”

MARKET REACTION: Shares of AGCO [NYSE: AGCO] were up 3.23% or $3.43 to $102.70 as of 3:09 p.m. ET. The company has a market capitalization of $7.92 billion.