AGCO Reports First Quarter Results

AGCO, Your Agriculture Company (NYSE:AG), a worldwide manufacturer and distributor of agricultural equipment, reported net sales of approximately $1.3 billion for the first quarter of 2010, a decrease of approximately 13.3% compared to net sales of approximately $1.5 billion for the first quarter of 2009. Reported net income per share was $0.10 for the first quarter of 2010, and adjusted net income, which excludes restructuring and other infrequent expenses, was $0.12 per share for the first quarter of 2010. These results compare to reported and adjusted net income of $0.36 per share for the first quarter of 2009. Excluding favorable currency translation impacts of approximately 8.6%, net sales in the first quarter of 2010 decreased approximately 22.0% compared to the same period in 2009.

“We faced contrasting regional industry demand among the major global agricultural markets during the first quarter of 2010,” stated Martin Richenhagen, Chairman, President and Chief Executive Officer. “In Brazil, market demand was near record levels, and we were very pleased with our sales and margin performance. In Western Europe, industry conditions continued to soften throughout the first quarter and remained below the strong levels that existed in early 2009. Industry demand in North America has stabilized, with the professional producer segment showing the most strength. During the first quarter, we closely managed production, temporarily idled factories and limited working capital usage which improved our cash position compared to the first quarter of 2009. As expected, these initiatives also curtailed wholesale shipments which put pressure on first quarter sales, lowered factory productivity and reduced margins.”

“Margin improvement will continue to be a major focus for AGCO in the remainder of 2010,” continued Mr. Richenhagen. “We will closely manage the seasonal build in our inventory during the second quarter to position the company for stronger second half performance. We also plan to maintain our investments in new product development at a high level in preparation for the Tier 4 emissions requirements. AGCO’s focus on cash flow generation and debt reduction over the past four years greatly improved our financial condition. On March 5, 2010, Standard & Poor’s recognized AGCO’s financial progress by upgrading our debt rating to investment grade.”