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Dec 31, 2019
AGCO Q4 2019 Earnings Report
AGCO's fourth quarter results reflected the impact of challenging market conditions and higher warranty expenses.
Key Takeaways
AGCO reported net sales of approximately $2.5 billion for the fourth quarter of 2019, a decrease of approximately 3.0% compared to the fourth quarter of 2018. Reported net loss was $1.17 per share for the fourth quarter of 2019, and adjusted net income was $0.94 per share.
Reported fourth quarter regional sales results: Europe/Middle East (“EME”) 0.2%, North America 1.8%, South America (20.0)%, Asia/Pacific/Africa (“APA”) (13.3)%
Constant currency fourth quarter regional sales results: EME 3.0%, North America 1.6%, South America (14.6)%, APA (10.8)%
Fourth quarter adjusted earnings per share were negatively impacted by softer than anticipated market demand in EME, APA and South America; higher warranty expense; brand and product rationalization costs for grain and protein equipment and a higher effective tax rate
Warranty expense increased approximately $23 million compared to the fourth quarter of 2018 due primarily to field product improvement campaign costs to support new harvesting products
Revenue by Geographic Location
Forward Guidance
AGCO’s net sales for 2020 are expected to reach approximately $9.2 billion reflecting improved sales volumes and positive pricing. Gross and operating margins are expected to improve from 2019 levels, reflecting the positive impact of pricing and cost reduction efforts. Based on these assumptions, 2020 earnings per share is targeted in a range from $5.00 to $5.20.
Positive Outlook
- Improved sales volumes
- Positive pricing
- Gross margin improvement
- Operating margin improvement
- Cost reduction efforts
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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