AGCO Profit Rises; Lifts FY Outlook - Update

(RTTNews) - Agricultural equipment maker AGCO Corp. (AGCO), Wednesday posted a higher second-quarter profit, aided by a thirteen percent rise in revenues amid demand for its products in the Americas and other regions. Both earnings and revenue for the quarter came in ahead of Wall Street estimates.

Consequently, the company lifted its earnings and revenue outlook for the full year 2013. AGCO shares gained nearly 3 percent on the New York Stock Exchange.

"Healthy market demand in North and South America generated growth in both sales and production. Low levels of material cost inflation coupled with our margin improvement initiatives also contributed to our improved results," said CEO Martin Richenhagen.

The company is scaling up margins through purchasing actions, factory efficiencies and product development, added Richenhagen.

AGCO makes a variety of tractors and self-propelled three- and four-wheeled vehicles, among other products.

The Duluth, Georgia-based company reported quarterly net income of $213.7 million or $2.15 per share, compared with $205 million or $2.08 per share last year.

On average, 15 analysts polled by Thomson Reuters expected earnings of $1.80 per share for the quarter. Analysts' estimates typically exclude special items.

Net sales in the second quarter increased to $3 billion from $2.7 billion a year ago, and topped analysts' expectations of $2.83 billion.

Among regions, sales in South America jumped 28 percent, Asia/Pacific grew 18 percent, Europe/Africa/ Middle East climbed 12 percent, and North America was up 8 percent.

Operating margin for the quarter expanded to 10.7 percent from 9.8 percent a year ago.

For 2013, AGCO now estimates earnings of about $6.00 per share on sales of $10.8 billion to $11 billion. The company had earlier expected earnings in the range of $5.50 to $5.70 per share on sales of $10.5 billion to $10.7 billion.

Analysts currently expect earnings of $5.62 per share on sales of $10.53 billion for 2013.

The company's stock is trading at $56.50, up $1.62 or 2.96%, on a volume of 1 million shares.