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AGCO Corp (AGCO) Q1 Earnings & Sales Top Estimates, Up Y/Y
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AGCO Corporation (AGCO - Free Report) delivered adjusted earnings per share (EPS) of $2.39 in first-quarter 2022 compared with the prior-year quarter’s $2 per share. The reported figure beat the Zacks Consensus Estimate of $1.88. The quarterly results reflect favorable farm fundamentals, robust global demand and price increase actions.
Including one-time items, AGCO posted EPS of $2.03 compared with the year-ago quarter’s $1.99.
Revenues increased 13% year over year to $2,686 million during the March-end quarter. The top line surpassed the Zacks Consensus Estimate of $2,640 million. Excluding the unfavorable currency-translation impact of 5%, net sales were up 18% year over year.
Operational Update
Cost of sales increased 14% year over year to $2,054 million during the first quarter. Gross profit increased 11% year over year to $631 million during the reported quarter. The gross margin came in at 23.4% compared with the prior-year quarter’s 23.9%.
Selling, general and administrative expenses came in at $271 million compared with the year-ago quarter’s $261 million. Adjusted income from operations was up 24% year over year to $243 million. Consequently, the operating margin came in at 9% compared with the year-earlier quarter’s 8%.
AGCO Corporation Price, Consensus and EPS Surprise
Sales in the North America segment were up 15% year over year to $701 million during the January-March period. The segment reported an operating income of $55 million compared with the prior-year quarter’s $75 million.
Sales in the South America segment increased 48% year over year to $356 million. The segment reported an operating profit of $46 million compared with the prior-year quarter’s $16 million.
The EME (Europe/Middle East) segment’s sales came in at $1,403 million compared with the $1,327 million reported in the year-ago period. The EME’s operating income came in at $162 million compared with the year-ago quarter’s income of $144 million.
Sales in the Asia/Pacific segment were up 13% year on year to $225 million. The segment registered an operating profit of $34 million compared with the year-ago quarter’s $21 million.
Financial Update
AGCO Corporation reported cash and cash equivalents of $656 million at the end of the first quarter, down from $889 million at the 2021-end. The company utilized $577 million cash in operating activities in the first quarter compared with $315 million in the prior-year quarter.
Guidance
AGCO Corporation expects net sales for 2022 between $12.5 billion and $12.7 billion, suggesting increased sales volumes and pricing, partly offset by the negative impact of foreign currency translation. Gross and operating margins are expected to be higher than the 2021 levels, owing to higher sales and production volumes as well as the company’s pricing actions to mitigate material and labor cost inflation. The improved profitability is likely to support incremental investments in engineering and other technology to advance AGCO’s precision agriculture and digital initiatives. Considering these, management projects EPS for the current year is expected to be between $11.70 and $11.90.
Price Performance
AGCO Corporation’s shares have declined 14.3% in the past year compared with the industry’s loss of 1.6%.
Image Source: Zacks Investment Research
Zacks Rank and Stocks to Consider
AGCO Corporation currently carries a Zacks Rank #3 (Hold).
Alcoa has a projected earnings growth rate of 107% for the current year. The Zacks Consensus Estimate for 2022 earnings has moved north by 76% in the past 60 days.
Alcoa delivered a trailing four-quarter earnings surprise of 17.4%, on average. Alcoa’s shares have surged 69.3% in the past year.
Packaging Corporation has an expected earnings growth rate of 16.2% for 2022. The Zacks Consensus Estimate for the current year’s earnings has moved up 4.2% in the past 60 days.
PKG has a trailing four-quarter earnings surprise of 19.6%, on average. Packaging Corporation’s shares have gained 5.4% in the past year.
Graphic Packaging has an estimated earnings growth rate of 86.8% for the current year. In the past 60 days, the Zacks Consensus Estimate for current-year earnings has been revised upward by 7.6%.
Graphic Packaging pulled off a trailing four-quarter earnings surprise of 7.2%, on average. The company’s shares have appreciated 14.8% in a year’s time.
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AGCO Corp (AGCO) Q1 Earnings & Sales Top Estimates, Up Y/Y
AGCO Corporation (AGCO - Free Report) delivered adjusted earnings per share (EPS) of $2.39 in first-quarter 2022 compared with the prior-year quarter’s $2 per share. The reported figure beat the Zacks Consensus Estimate of $1.88. The quarterly results reflect favorable farm fundamentals, robust global demand and price increase actions.
Including one-time items, AGCO posted EPS of $2.03 compared with the year-ago quarter’s $1.99.
Revenues increased 13% year over year to $2,686 million during the March-end quarter. The top line surpassed the Zacks Consensus Estimate of $2,640 million. Excluding the unfavorable currency-translation impact of 5%, net sales were up 18% year over year.
Operational Update
Cost of sales increased 14% year over year to $2,054 million during the first quarter. Gross profit increased 11% year over year to $631 million during the reported quarter. The gross margin came in at 23.4% compared with the prior-year quarter’s 23.9%.
Selling, general and administrative expenses came in at $271 million compared with the year-ago quarter’s $261 million. Adjusted income from operations was up 24% year over year to $243 million. Consequently, the operating margin came in at 9% compared with the year-earlier quarter’s 8%.
AGCO Corporation Price, Consensus and EPS Surprise
AGCO Corporation price-consensus-eps-surprise-chart | AGCO Corporation Quote
Segment Performance
Sales in the North America segment were up 15% year over year to $701 million during the January-March period. The segment reported an operating income of $55 million compared with the prior-year quarter’s $75 million.
Sales in the South America segment increased 48% year over year to $356 million. The segment reported an operating profit of $46 million compared with the prior-year quarter’s $16 million.
The EME (Europe/Middle East) segment’s sales came in at $1,403 million compared with the $1,327 million reported in the year-ago period. The EME’s operating income came in at $162 million compared with the year-ago quarter’s income of $144 million.
Sales in the Asia/Pacific segment were up 13% year on year to $225 million. The segment registered an operating profit of $34 million compared with the year-ago quarter’s $21 million.
Financial Update
AGCO Corporation reported cash and cash equivalents of $656 million at the end of the first quarter, down from $889 million at the 2021-end. The company utilized $577 million cash in operating activities in the first quarter compared with $315 million in the prior-year quarter.
Guidance
AGCO Corporation expects net sales for 2022 between $12.5 billion and $12.7 billion, suggesting increased sales volumes and pricing, partly offset by the negative impact of foreign currency translation. Gross and operating margins are expected to be higher than the 2021 levels, owing to higher sales and production volumes as well as the company’s pricing actions to mitigate material and labor cost inflation. The improved profitability is likely to support incremental investments in engineering and other technology to advance AGCO’s precision agriculture and digital initiatives. Considering these, management projects EPS for the current year is expected to be between $11.70 and $11.90.
Price Performance
AGCO Corporation’s shares have declined 14.3% in the past year compared with the industry’s loss of 1.6%.
Image Source: Zacks Investment Research
Zacks Rank and Stocks to Consider
AGCO Corporation currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the Industrial Products sector are Alcoa (AA - Free Report) , Packaging Corporation of America (PKG - Free Report) and Graphic Packaging Holding Company (GPK - Free Report) . All of these stocks flaunt a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Alcoa has a projected earnings growth rate of 107% for the current year. The Zacks Consensus Estimate for 2022 earnings has moved north by 76% in the past 60 days.
Alcoa delivered a trailing four-quarter earnings surprise of 17.4%, on average. Alcoa’s shares have surged 69.3% in the past year.
Packaging Corporation has an expected earnings growth rate of 16.2% for 2022. The Zacks Consensus Estimate for the current year’s earnings has moved up 4.2% in the past 60 days.
PKG has a trailing four-quarter earnings surprise of 19.6%, on average. Packaging Corporation’s shares have gained 5.4% in the past year.
Graphic Packaging has an estimated earnings growth rate of 86.8% for the current year. In the past 60 days, the Zacks Consensus Estimate for current-year earnings has been revised upward by 7.6%.
Graphic Packaging pulled off a trailing four-quarter earnings surprise of 7.2%, on average. The company’s shares have appreciated 14.8% in a year’s time.