Agco Posts Strong Fourth-Quarter Profit Rise

Duluth, Ga. -- Farm equipment manufacturer Agco (AG Quote) said Monday that strong retail sales and improved margins helped push fourth quarter profit up nearly 26%, beating Wall Street expectations even as sales slipped.

But the company said it expects sharp declines in both earnings and sales in 2009 as a result of "significant uncertainty and softening demand in all major farm equipment markets."

The Duluth, Ga.-based company said it earned $102 million, or $1.08 per share, in the three months ended Dec. 31, up from $81.1 million, or 82 cents per share, a year earlier.

Revenue slipped to $2.16 billion from $2.17 billion a year ago, hurt by the strong dollar.

Analysts expected lower earnings per share of $1.01 on higher revenue of $2.36 billion.

Martin Richenhagen, chairman, president and chief executive, cited strong industry retail sales and improved operating margins for the fourth quarter compared with the same period a year earlier. Agco's North American segment showed significant improvement, particularly increased profitability in the sprayer business, he said.

For all of 2008, net income was $400 million, or $4.09 per share, up from $246.3 million, or $2.55 per share, for 2007. Annual revenue rose 23% to $8.42 billion from $6.83 billion.

For 2009, Agco said it expects per share of $3.00 to $3.25 on sales of $7.5 billion to $7.8 billion. Analysts were looking for Agco earnings of $3.22 a share on revenue of $7.74 billion in 2009.