AGCO Q3 Results Tops On Strong Demand, Raised FY23 EPS Guidance For This Agricultural Machinery Maker

AGCO Corp AGCO reported third-quarter FY23 net sales growth of 10.7% Y/Y to $3.456 billion, slightly missing the consensus of $3.463 billion.

The company's results benefitted from strong demand for its technology-rich products on healthy crop production, favorable farm economics and supply chain improvement.

Regional Sales: Sales included: South America +26.0% Y/Y, Europe/Middle East +14.2% Y/Y, North America +3.4% Y/Y and Asia/Pacific/Africa (-16.9% Y/Y).

The operating margin stood at 12.3%. Adjusted EPS improved to $3.97, beating the consensus of $3.30.

As of Sept. 30, 2023, cash, cash equivalents, and restricted cash stood at $680.7 million.

In the third quarter, AGCO entered into a joint venture with Trimble Inc TRMB, under which AGCO will acquire an 85% interest in Trimble's portfolio of Ag assets and technologies for cash consideration of $2.0 billion and the contribution of JCA Technologies.

Related: AGCO's Trimble Ag JV Acquisition Is A Value-Creation Moment, Says Analyst

Dividend: The company declared a quarterly dividend per share of $0.29, payable on Dec. 15, 2023, to stockholders of record on Nov.15, 2023.

FY23 Outlook: The agricultural machinery maker reiterated its net sales outlook at about $14.7 billion (vs. street view of $14.65 billion) and raised the adjusted EPS guidance to around $15.75 (from $15.25 prior) vs consensus of $15.3.

The company expected gross and operating margins to improve, reflecting higher sales, production volumes and favorable pricing and sales mix. 

Also Read: Analysts See AGCO And Trimble's $2.4B Partnership As 'Positive Catalyst' For Farm Equipment Giant's Stock

Price Action: AGCO shares are trading higher by 1.73% at $114.13 on the last check Tuesday. 

Photo: Courtesy AGCO