Agco Corp. (NASDAQ:AGCO), a global distributor of agricultural equipment, shot into the green Tuesday after reporting better-than expected second-quarter earnings, driven by strong performances in South America.
The Georgia-based company posted net income totaling $62.9 million, or 66 cents a share, up from $57.4 million, or 61 cents a share, in the year-earlier period, and jumping ahead of analyst estimates of 46 cents, according to a Thomson Reuters poll.
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Revenue dropped 1.4% from a year ago, totaling $1.7 billion, and beating the Street’s view of $1.68 billion.
Agco CEO Martin Richenhagen said the second quarter results were largely impacted by “robust performance” in South America, noting market demand remained “very strong” in Brazil and Argentina, and sales in the region increased nearly 74.2%. Strong earnings in that region were offset by weak conditions in the company’s other global markets.
“AGCO’s market leadership position in Brazil allowed us to take advantage of strong market conditions by doubling our sales and expanding our margins in that region,” he said. “This success offset lower results in the Europe/Africa/ Middle East segment due to the weak conditions that we are facing across the Western European markets.”
Agco’s North American region saw a decrease of 19.3% in revenue compared to the second quarter of last year, hampered by low sales of utility tractors and hay products.