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» AGCO Corp. Q2 2008 Earnings Call
We wish to caution you that these statements are predictions and that actual events or results may differ materially. We refer you to the periodic reports that we file from time-to-time with the Securities and Exchange Commission, including the company's Form 10-K for the year ended December 31, 2010. These documents discuss important factors that could cause the actual results to differ materially from those contained in our forward-looking statements. A replay of this call will be available on our website.On the call with me this morning as you have heard already is Martin Richenhagen, our Chairman, President and Chief Executive Officer; and Andy Beck, our Senior Vice President and Chief Financial Officer. With that, Martin, please go ahead. Martin Richenhagen Thank you, Greg, and good morning to everyone. The year 2011 is turning out to be a good year in the global farm equipment industry. Farmers are progressing with their harvests and commodity prices remain at attractive levels. AGCO took advantage of these positive conditions and delivered another quarter of strong sales growth and margin expansion in the third quarter of 2011, compared to the same period last year. AGCO’s operating margins improved nearly 300 basis points in the first nine months of 2011, compared to the first nine months of 2010. Our Europe, Africa, Middle-East business delivered exceptional performance in the third quarter. With industry demand below peak levels in Western Europe, our EAME region produced record third quarter sales on a constant currency basis and improved operating margins by over 350 basis points compared to the third quarter of 2010. In North America we capitalized in healthy industry conditions, grew sales, and for the first nine months of 2011 expanded operating margins by over 250 basis points compared to the same period in 2010. Slide three summarizes our results for the third quarter and first nine months of 2011. AGCO reported adjusted earnings per share for the third quarter of $0.87, up 32% compared to a year ago. In addition, our strong operating performance translated into improved cash flow.
For the first nine months of 2011, AGCO’s free cash flow improved more than $150 million. AGCO’s tractor and combine production volumes for 2010 and 2011 are illustrated on slide four. AGCO, third quarter 2011 tractor and combine production was flat compared to the same period in 2010. Lower production volumes in South America were offset by increased production levels in our European and North American factories. AGCO order board for the North American and EAME markets at the end of September 2011 is double the level at the end of September 2010.South American order boards remain strong but were down from very high levels at the end of third quarter of 2010. We expect production volumes to be up 8% to 9% in the fourth quarter of 2011 versus the comparable period in 2010. For the full year of 2011 we expect production to be up approximately 9% from 2010 levels. Slide five details industry volumes, unit volumes so to say, by region for the first nine months of 2011. Industry tractor sales in North America were up modestly compared to 2010 levels. In North America, industry sales of utility tractors increased due to improvement in the dairy and livestock sectors. Sales of high horsepower tractors remained elevated and were up slightly from the strong levels in the first nine months of 2010. As expected, combine industry retail sales were lower in the third quarter and are now down 4% for the first nine months of 2011 from the high levels experienced last year. Read the rest of this transcript for free on seekingalpha.com