Net income was $90.4 million in the quarter ended June 30, equal to $1.14 per share on the common stock, down from $91.6 million, or $1.14 per share, in the same period a year ago.
Net sales for the quarter were $2.5 billion, up from $2.16 million a year earlier.
|Martin Richenhagen, chairman, president and CEO|
“AGCO delivered solid sales and earnings growth in the second quarter,” said Martin Richenhagen, chairman, president and chief executive officer. “Healthy industry conditions in Western Europe and improved market demand in North America supported sales and margin improvement in those regions offsetting weak results in South America.
“Our sales performance and customer response to AGCO’s new product line-up confirms our additional investments in product development are paying off. We continue to focus on innovative products like our new Rogator C-series high performance sprayers and our expanding line-up of platform designed tractors that deliver productivity on the farm and expand our market position.”
Global industry sales of farm equipment in the first half of 2018 were also mixed across AGCO’s key markets, with future demand dependent on factors such as crop conditions, commodity price development and government trade and farm support policy, he said.
“Longer term, we are optimistic about the fundamentals supporting commodity prices and farm income as well as healthy growth in our industry,” Richenhagen said.
AGCO anticipates net sales of $9.3 billion for 2018, reflecting improved sales volumes, positive pricing as well as acquisition and foreign exchange impacts.
Gross and operating margins are expected to improve from 2017 levels due to higher sales as well as the benefits resulting from the company’s cost reduction initiatives, partially offset by increased engineering expenses.
Based on these assumptions, 2018 earnings per share are targeted at approximately $3.46 on a reported basis, or approximately $3.70 on an adjusted basis.
Net sales in the North American region increased nearly 27% in the first six months of 2018 compared to the same period of 2017, excluding the positive impact of currency translation.
Precision Planting, which was acquired in the fourth quarter of 2017, contributed sales of approximately $82.9 million in its seasonally strong first half.
AGCO’s South American net sales decreased 5.5% in the first six months of 2018 compared to the first six months of 2017, excluding the impact of unfavorable currency translation. Sales declined in both Argentina and Brazil.
Net sales in the AGCO’s Europe/Middle East region increased 14% in the first six months of 2018 compared to the same period in 2017, excluding favorable currency translation impacts.
Asia/Pacific/Africa net sales increased 5%, excluding the positive impact of currency translation, in the first six months of 2018 compared to the same period in 2017.
AGCO owns Cimbria Holdings Ltd., a manufacturer of products and solutions for the processing, handling and storage of seed and grain; Intersystems, Omaha, Nebraska, U.S., a material handling company; and GSI, Assumption, Illinois, U.S., a manufacturer of grain storage and protein production systems.