Key Takeaways:
- AGCO reports third quarter net sales of $2.5 billion, down 4.7% year-over-year.
- Adjusted net income of $1.35 per share, up from $0.68 per share in Q3 2024.
- Europe/Middle East region leads with 27.5% sales growth; North America declines 32.1%.
- Company announces $1 billion share repurchase program beginning in Q4 2025.
- Full-year 2025 guidance targets approximately $9.8 billion in net sales and $5.00 earnings per share.
ACGO's Third Quarter Overview
AGCO (NYSE: AGCO), a global leader in the design, manufacture, and distribution of agricultural machinery and precision agriculture technology, reported third quarter 2025 net sales of $2.5 billion, a decrease of 4.7% compared to the same quarter in 2024. Excluding favorable foreign currency translation of 3.7%, sales decreased 8.4%.
Reported net income was $4.09 per share, while adjusted net income was $1.35 per share, compared to $0.40 and $0.68, respectively, in the prior year period.
“AGCO delivered another solid quarter navigating a complex global landscape shaped by challenging farm economics, high interest rates, and cautious capital investment,” said Eric Hansotia, Chairman, President, and CEO of AGCO. “Our investments in precision agriculture, autonomous solutions, and sustainable technologies continue to support strong demand for our premium brands.”
ACGO's Financial and Regional Performance
For the first nine months of 2025, net sales totaled $7.2 billion, down 18.4% year-over-year, reflecting the divestiture of AGCO’s Grain & Protein business in 2024. Reported net income for the period was $8.45 per share, and adjusted net income was $3.11 per share.
Third Quarter Regional Highlights:
- Europe/Middle East: up 27.5% (constant currency +20.3%)
- North America: down 32.1%
- South America: down 8.1% (constant currency -9.5%)
- Asia/Pacific/Africa: down 5.9% (constant currency -5.2%)
Regional Operating Margins:
- Europe/Middle East: 15.6%
- North America: -10.5%
- South America: 5.7%
- Asia/Pacific/Africa: 4.9%
AGCO completed the sale of its ownership interest in TAFE for $260 million, generating $230 million in after-tax proceeds. The company plans to allocate these proceeds toward $300 million in share repurchases during Q4 2025 as part of a broader $1 billion buyback initiative.
Market Conditions
Global agricultural machinery markets remained under pressure through the third quarter as near-record crop production weighed on commodity prices and constrained crop margins.
- North American tractor sales declined 10% year-over-year, with sharp declines in higher-horsepower categories. Combine sales were down 29%.
- In Brazil, tractor sales rose 3%, driven by strong demand for smaller and mid-sized tractors despite high financing costs.
- Western Europe saw an 8% decline in tractor sales, with only Spain recording growth.
- Dairy and livestock segments remained more resilient, supported by strong prices and steady demand.
Hansotia noted that while traditional equipment demand is softening, farmer investment in precision and efficiency technologies remains strong as operators look to protect margins.
Regional Results
North America: Sales decreased 32.1% year-over-year due to weaker industry conditions and under-production. Operating income declined by $56.4 million as margins remained negative.
South America: Sales fell 9.5% on lower industry demand and modest pricing pressure. Operating income declined by $22.6 million.
Europe/Middle East: Sales rose 20.3% in constant currency, reflecting higher production levels and demand recovery. Operating income increased by $163.1 million, driven by stronger volumes.
Asia/Pacific/Africa: Sales declined 5.2%, offset slightly by growth in Australia and Africa. Operating income rose $0.9 million due to lower manufacturing costs.
AGCO's Outlook
AGCO expects full-year 2025 net sales of approximately $9.8 billion and adjusted operating margins of around 7.5%. The company targets full-year earnings of roughly $5.00 per share.
Lower production volumes will be partially offset by cost control measures and stable engineering expenditures. Guidance assumes the current tariff environment remains in place.
Hansotia concluded, “Despite softer end markets, we remain confident in our strategic direction. Our diversified global footprint, disciplined execution, and focus on innovation continue to position AGCO for long-term growth.”
