Record Q3 for AGCO

AGCO, a worldwide manufacturer and distributor of agricultural equipment, reported its results for the third quarter ended Sept. 30. Net sales for the period were approximately $3.1 billion, an increase of approximately 14.5% compared to the third quarter of 2021.

AGCO announced record net sales for the third quarter, driven by North and South America. (Photo: AGCO)

Excluding unfavorable foreign currency translation of approximately 11.8%, net sales in the quarter increased approximately 26.3% compared to the third quarter of 2021.

“We delivered record third quarter sales and earnings driven through the consistent execution of our farmer-first strategy, coupled with continued robust market conditions in many of our regions,” said Eric Hansotia, AGCO’s chairman, president and CEO. “Our solid operational performance and continued strong pricing overcame ongoing supply chain challenges, inflationary pressures and significant currency headwinds.

“Healthy farm fundamentals are supporting order boards that now stretch well into 2023 in some regions. The success of our farmer-first strategy, focused on growing our precision ag business, globalizing a full-line of our Fendt branded products and expanding our parts and service business, is generating strong growth in these margin-rich businesses.”

Net sales for the first nine months of 2022 were approximately $8.8 billion, an increase of approximately 9.6% compared to the same period in 2021. Excluding unfavorable foreign currency translation of approximately 8.2%, net sales for the first nine months of 2022 increased approximately 17.9% compared to the same period in 2021.

Eric Hansotia

“Healthy farm income is projected across most of the major agricultural production regions with elevated crop prices offsetting higher fuel, fertilizer and other input costs,” Hansotia said. “Despite ongoing supply chain disruptions, favorable farm economics are expected to generate strong demand across all the major global markets well into 2023.

“Global market conditions remain positive as favorable farm economics are allowing farmers to upgrade and replace their aging fleets. At the same time, our smart technology product lines are in strong demand and are helping to drive meaningful productivity improvements for our customers through both retrofitting their current equipment and in our new product offerings. We will continue to accelerate investments in premium technology, smart farming solutions and enhanced digital capabilities to support our farmer-first strategy while helping to sustainably feed the world.”

Global industry production and retail sales were down modestly in the first nine months of 2022 compared to last year’s elevated levels due primarily to supply chain limitations, AGCO reported. Industry retail sales for tractors in North America were down approximately 6% in the first nine months of 2022 compared to last year. The decline was driven by weaker sales in smaller tractors partially offset by improved sales of high horsepower tractors, which increased approximately 8% in the first nine months of 2022 compared to the same period in 2021.

In Western Europe, industry retail tractor sales decreased approximately 10% in the first nine months of 2022 compared to strong levels in the same period of 2021. Farmer sentiment in the region has been negatively impacted by the conflict in Ukraine, looming energy concerns and higher input cost inflation. Forecasts for healthy farm income in Western Europe are expected to support relatively flat retail demand for equipment in the fourth quarter of 2022.

South American industry retail sales increased during the first nine months of 2022 in both Brazil and Argentina compared to 2021 levels. Healthy farm income, supportive exchange rates and continued expansion in planted acreage are driving increased investments in high tech farm equipment.

“Disruptions in the global supply chain are continuing to limit industry production,” Hansotia said. “However, we continue to expect strong demand in the fourth quarter to support full year 2022 industry retail sales above 2021 levels in South America, relatively flat sales in North America and modestly lower sales in Western Europe.”