AGCO reported its results for the third quarter ended Sept. 30, 2022. Net sales for the third quarter were approximately $3.1 billion, an increase of approximately 14.5% compared to the third quarter of 2021. North America, sales increased as well to 43%.
Global industry production and retail sales were down modestly in the first nine months of 2022 compared to last year’s elevated levels due primarily to supply chain limitations. Industry retail sales for tractors in North America were down approximately 6% in the first nine months of 2022 compared to last year. The decline was driven by weaker sales in smaller tractors partially offset by improved sales of high horsepower tractors, which increased approximately 8% in the first nine months of 2022 compared to the same period in 2021.
“We delivered record third quarter sales and earnings driven through the consistent execution of our farmer-first strategy, coupled with continued robust market conditions in many of our regions,” stated Eric Hansotia, AGCO’s Chairman, President and Chief Executive Officer. “Our solid operational performance and continued strong pricing overcame ongoing supply chain challenges, inflationary pressures and significant currency headwinds. Healthy farm fundamentals are supporting order boards that now stretch well into 2023 in some regions.
He continued, “Global market conditions remain positive as favorable farm economics are allowing farmers to upgrade and replace their aging fleets. At the same time, our smart technology product lines are in strong demand and are helping to drive meaningful productivity improvements for our customers through both retrofitting their current equipment and in our new product offerings.”
The ability of the Company’s supply chain to deliver parts and components on schedule remains difficult to predict. The following outlook is based on AGCO’s current estimates of component deliveries. AGCO’s results will be impacted if the actual supply chain delivery performance differs from these estimates.
- Net sales for 2022 ranging from $12.5 to $12.6 billion
- Gross and operating margins are projected to improve from 2021 levels, reflecting the impact of higher sales and production volumes as well as favorable pricing to offset material and labor cost inflation
- Increased investments in engineering and other technology investments to support AGCO’s precision ag and digital initiatives
- Full year adjusted earnings per share of $11.70 to $11.90