DULUTH, Ga. — AGCO reported net sales of $3.2 billion for the second quarter ended June 30, 2024, a decrease of 15.1% compared to the second quarter of 2023. Reported net loss was $(4.92) per share for the second quarter of 2024, which includes the estimated loss on the Grain & Protein business held for sale, and adjusted net income was $2.53 per share. Excluding unfavorable foreign currency translation of 0.9%, net sales in the second quarter of 2024 decreased 14.2% compared to the second quarter of 2023.
Ahead of AGCO's earnings call, JP Morgan analysts said in a note to investors, "Production hours are guided down 20-25% in 2024 (vs. prior down 12-15%), while engineering spend is expected to be about flat YoY (vs. prior up 3% YoY). The 2Q print and FY24 guide imply 2H24 net sales down ~13% YoY to ~$6.3B (vs. consensus $6.8B)."
Net sales for the first six months of 2024 were approximately $6.2 billion, which is a decrease of 13.7% compared to 2023. For the first six months of 2024, reported net loss was $(2.67) per share, which includes the estimated loss on the Grain & Protein business held for sale, and adjusted net income was $4.85 per share. Currency translation impacts were flat for the first six months of 2024 compared to the same period in 2023.
"While we continue to successfully execute our Farmer-first strategy, second quarter results were influenced by weakening market conditions and significant production cuts aimed at reducing our Company and dealer inventories," said Eric Hansotia, AGCO's chairman, president and chief executive officer. "Declines in commodity prices and lower projected farm income in 2024 have negatively affected farmer sentiment, further dampening global industry demand. Given the current environment, we are taking aggressive actions, including our recently announced restructuring program, to control expenses, reduce production levels and lower investments in working capital. We are balancing these near-term cost reductions with continued investment in our longer-term high-margin growth initiatives that will help deliver more sustainable results through the economic cycles."
"On July 25, we announced an agreement to divest the Grain & Protein business," continued Hansotia. "The divestiture of this business supports our strategic transformation, recently accelerated by the PTx Trimble joint venture. Divesting allows us to streamline and sharpen our focus on AGCO's portfolio of award-winning agricultural machinery and precision ag technology products. Going forward, we will be better positioned for long-term growth in our higher margin and higher free cash flow generating businesses. Simultaneously, it will raise our profitability through the cycle as Grain & Protein has historically been a below average margin business."
Source : Farm Equipment