AGCO Stock Surges On Q4 Beat, Solid FY22 Outlook

  • AGCO Corp AGCO reported fourth-quarter net sales growth of 16.1% year-over-year to $3.16 billion, beating the consensus of $3.05 billion.
  • Regional Sales: Europe/Middle East $1.8 billion (+4.3% Y/Y), North America $674.7 million (+39.1% Y/Y), South America $405.6 million (+51.6% Y/Y), Asia/Pacific/Africa $278 million (+15% Y/Y).
  • Adjusted EPS improved to $3.08 from $1.54 in 4Q20, beating the consensus of $1.77.
  • The gross margin contracted by 30 bps to 21.6%. The operating income increased by 48.3% Y/Y to $264 million, and the margin expanded by 182 bps to 8.4%.
  • AGCO generated ~$683 million in cash flow from operations and ~$413 million in free cash flow in FY21. It held cash and equivalents of $889.1 million as of year-end.
  • "Our smart technology product lines are in strong demand and are driving productivity improvements for our customers and growth opportunities for AGCO. Looking forward to 2022, we expect supply chain pressures to persist, presenting challenges throughout the year," said Eric Hansotia, AGCO's Chairman, President, and CEO.
  • FY22 Outlook: AGCO expects net sales of ~$12.3 billion (consensus $11.89 billion), reflecting improved sales volumes and pricing partially offset by unfavorable foreign currency translation.
  • The company targets EPS of ~$11.50, above the consensus of $10.58. It anticipates gross and operating margins to improve from 2021 levels.
  • Price Action: AGCO shares are trading higher by 7.96% at $124.97 on the last check Tuesday.
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