AGCO: First Quarter Down Due To Lack Of Global Demand

AGCO Corp. said its first-quarter earnings fell more than 42% on weakening demand due to global economic turmoil, the
Associated Press reports. AGCO reported earnings of $33.7 million, compared with $58.8 million, for the same period a year ago. Revenue was down 11.6%, to $1.6 billion, compared with $1.8 billion for the same period in 2008.

AGCO said its earnings for the current quarter would be “significantly lower” than the year-ago period and cut its full-year 2009 outlook. The company said businesses are having a difficult time securing financing for its equipment due to constrained credit markets around the world.

Tighter credit affected sales in Eastern Europe, Russia and South America. Dry weather conditions in South America also negatively affected sales. Sales in North America rose 13% on strong sales of balers and tillage equipment, although retail sales of tractors fell about 20%.

AGCO said that it would work to bring production in line with shrinking demand, making short-term cuts at its facilities. The company cited production cuts and working-capital-reduction initiatives for its second-quarter expectations for sharply lower earnings.