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AGCO, Your Agriculture Company (NYSE:AGCO), a worldwide manufacturer and distributor of agricultural equipment, reported net sales of approximately $2.8 billion for the second quarter of 2014, a decrease of approximately 9.8% compared to net sales of approximately $3.0 billion for the second quarter of 2013. Net income for the second quarter of 2014 was $1.77 per share. This result compares to net income of $2.15 per share for the second quarter of 2013. Excluding favorable currency translation impacts of approximately 0.3%, net sales in the second quarter of 2014 decreased approximately 10.1% compared to the second quarter of 2013.
Net sales for the first six months of 2014 were approximately $5.1 billion, a decrease of approximately 6.7% compared to the same period in 2013. Excluding the unfavorable impact of currency translation of approximately 0.7%, net sales for the first six months of 2014 decreased approximately 6.0% compared to the same period in 2013. For the first six months of 2014, net income was $2.79 per share. This result compares to net income of $3.34 per share for the first six months of 2013.
Second Quarter Highlights
Regional sales results (1): North America -12.2%, Europe/Africa/ Middle East (“EAME”) -8.6%, South America -10.7%, Asia/Pacific (“APAC”) -13.3%
Regional operating margin performance: EAME 12.4%, North America 13.9%, South America 6.8%, APAC -3.2%
Full year earnings per share guidance reduced to approximately $5.00
Share repurchase program reduces outstanding shares by 4.2 million during 1H 2014
(1)Excludes currency translation impact.See reconciliation of Non-GAAP measures in appendix.
"In the second quarter, AGCO faced more challenging market conditions which resulted in a sales decline of about 10%," stated Martin Richenhagen, AGCO’s Chairman, President and Chief Executive Officer. "Falling commodity prices negatively impacted farmer sentiment, and demand for agricultural equipment softened across end markets in North America and Europe while remaining weak in South America. Despite the difficult operating environment, our increased emphasis on new products with advanced technologies has been well received by our customers, and our retail market performance continues to be positive. AGCO experienced weakening order trends throughout the second quarter, and in response, the Company took aggressive actions to cut production, manage inventory levels, reduce operating expenses and generate cash flow. We will maintain these priorities during the third and fourth quarters.”