AGCO, Your Agriculture Company, a worldwide manufacturer and distributor of agricultural equipment, reported net sales of approximately $1.8 billion for the third quarter of 2016, an increase of approximately 1.5% compared to net sales of approximately $1.7 billion for the third quarter of 2015. Reported net income was $0.50 per share for the third quarter of 2016 and adjusted net income, which excludes restructuring expenses, was $0.51 per share. These results compare to reported and adjusted net income of $0.77 per share for the third quarter of 2015. Excluding unfavorable currency translation impacts of approximately 1.2%, net sales in the third quarter of 2016 increased approximately 2.6% compared to the third quarter of 2015.
Net sales for the first nine months of 2016 were approximately $5.3 billion, a decrease of approximately 3.5% compared to the same period in 2015. Excluding unfavorable currency translation impacts of approximately 2.9%, net sales for the first nine months of 2016 decreased approximately 0.6% compared to the same period in 2015. For the first nine months of 2016, reported net income was $1.20 per share and adjusted net income, which excludes restructuring expenses and a non-cash deferred income tax adjustment, was $1.63 per share. These results compare to reported net income of $2.33 per share and adjusted net income, excluding restructuring expenses, of $2.45 per share for the first nine months of 2015.
Third Quarter Highlights
- Reported regional sales results(1): North America (8.5)%, Europe/Africa/Middle East (“EAME”) +1.7%, South America +13.1%, Asia/Pacific (“APAC”) +18.6%
- Constant currency regional sales results(1)(2): North America (7.7)%, EAME +3.5%, South America +13.9%, APAC +17.1%
- Regional operating margin performance: North America 4.7%, EAME 8.6%, South America 2.3%, APAC 3.4%
- Full-year net income per share guidance remains unchanged
- Share repurchase program reduced outstanding shares by 0.9 million during the third quarter and 3.6 million during the first nine months of 2016
- AGCO completed the acquisition of Cimbria Holdings Limited (Cimbria) on September 12, 2016. Cimbria is a leading manufacturer of products and solutions for the processing, handling and storage of seed and grain.
“AGCO’s 2016 results reflect the adverse impact of operating in the lower end of the agricultural equipment cycle, particularly in North and South America,” stated Martin Richenhagen, AGCO’s Chairman, President and Chief Executive Officer. “In this environment, we are taking the necessary steps to ensure AGCO remains competitive by maintaining investment levels and serving our customers with superior products and services. Our long-term optimism within the agricultural industry and our business remains high. We are making significant investments in order to provide new products, new technology and improved distribution over the next few years aimed at further improving our competitive position. We also are investing for long-term growth as evidenced by our acquisition of Cimbria, which closed during the third quarter. This new investment significantly enhances our market position in the European grain handling and storage industry and provides an attractive opportunity to grow our business and expand our margins.”