AGCO, the Duluth-based global farm equipment maker, posted a 36 percent profit gain in the fourth quarter, but the company expects softer demand for its tractors and other products this year.
The Gwinnett County company beat Wall Street estimates, reporting net income of $139.3 million in the three months ending in December, compared with $102.5 million in the same period a year ago.
The average per-share profit of $1.40 beat the consensus analysts estimate of $1.34.
Fourth-quarter sales rose nearly 6 percent to $2.9 billion in the quarter. Sales were strongest in the company’s Europe/Africa/Middle East region, rising 10 percent. Sales in the Asia Pacific region grew 6 percent, while sales in North America were up 2 percent and in South America, 1 percent.
In announcing the results, Chairman Martin Richenhagen said 2014 will be challenging because farmers expect lower commodity prices to reduce their income, which means they will cut spending on new equipment. Richenhagen expects modest declines in demand for sprayer, grain storage and other products across most markets.
The chairman said the company continued to invest heavily to improve plant productivity, develop new products and meet emission requirements.
The company announced a $500 million share repurchase program in December. Stock buybacks can influence the value of shares.
For the year, net profit was $597.2 million, compared with $522.1 million in the prior year. AGCO said annual sales grew 8 percent to $10.8 billion.
The company expects per-share earnings for 2014 to be about $6 and sales of $10.8 billion to $11 billion. Analysts forecast per-share earnings of $5.76, and sales of $10.48 billion.
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