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Sep 30, 2020
AGCO Q3 2020 Earnings Report
AGCO's third quarter results were highlighted by sales growth and margin expansion across all regions.
Key Takeaways
AGCO reported strong Q3 2020 results with net sales increasing by 18.4% compared to Q3 2019. Reported and adjusted net income was $2.09 per share for the third quarter of 2020.
Reported regional sales results: Europe/Middle East (“EME”) 22.7%, North America 8.6%, South America 14.4%, Asia/Pacific/Africa (“APA”) 25.2%
Constant currency regional sales results: EME 18.9%, North America 9.1%, South America 48.5%, APA 21.3%
Regional operating margin performance: EME 13.3%, North America 10.0%, South America 6.1%, APA 10.1%
Year-to-date free cash flow increased over $309 million from the first nine months of 2019
Revenue by Geographic Location
Forward Guidance
Net sales in 2020 are expected to be approximately $8.9 billion reflecting relatively flat end-market demand, the unfavorable impact of currency translation, offset by the benefit of positive pricing. Adjusted operating margins are expected to be improved from 2019 levels due to positive pricing and expense reductions. Based on these assumptions, 2020 adjusted net income per share, excluding the impact of restructuring expenses and the non-cash goodwill impairment charge, is targeted at approximately $5.00.
Positive Outlook
- Relatively flat end-market demand
- Unfavorable impact of currency translation
- Benefit of positive pricing
- Adjusted operating margins are expected to be improved from 2019 levels
- Expense reductions
Challenges Ahead
- The Company is uncertain of the impact of the coronavirus (“COVID-19”) pandemic due to increased volatility in global economic and political environments, market demand for its products, supply chain disruptions, workforce availability, exchange rate and commodity price volatility and availability of financing, and their impact to the Company’s net sales, production volumes, costs and overall financial condition and liquidity.
Revenue & Expenses
Visualization of income flow from segment revenue to net income
Historical Earnings Impact
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Avg. Return Before/After Earnings
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