Tuesday, August 1, 2006
© Copyright 2013
Gwinnett Daily Post
LAWRENCEVILLE- Farm equipment maker AGCO Corp.'s shares declined 11 percent Monday after the company's second-quarter earnings fell short of Wall Street estimates - the result of a slower market in all regions.
Duluth-based AGCO said it posted a $40.9 million second-quarter profit, or 45 cents per share, versus $46 million in net income, or
47 cents per share, a year ago.
Analysts had expected AGCO's second-quarter earnings to reach 55 cents per share.
Meanwhile, sales dropped from $1.5 billion in the April-to-June period last year to $1.4 billion.
AGCO shares closed at $22.96 Monday.
Industry demand is expected to remain low through the end of the year in key markets, the company said.
A projected decline in farm income is weakening the North American market, while lingering effects of last year's drought are hampering southern Europe.
"Market conditions during the second quarter were down in all major regions," said CEO Martin Richenhagen. "In particular, we expect the softening demand for high horsepower tractors to continue in North America due to lower farm income anticipated in 2006. In South America, we expect demand to continue to weaken due to the impact of the strong Brazilian Real and high farm debt levels."
Founded in 1990, AGCO makes an array of farm equipment, including tractors, combines, hay tools and sprayers. Its products are distributed through more than 3,600 independent dealers in more than 140 countries worldwide.