Shares Duluth-based AGCO were up sharply Tuesday, gaining 9.5 percent, after the global farm equipment maker reported quarterly results that beat Wall Street estimates.
AGCO’s sales have been hit hard as farmers reduce their spending on tractors and other equipment because record grain harvests have softened prices farmers can get for their inventories.
AGCO is the company behind Massey Ferguson, Challenger and other farming equipment brands
To deal with the drop in sales, the company has reduced its inventory and trimmed its work force by 9 percent through a combination of layoffs, temporary furloughs, and the dismissal of temporary employees, Chief Executive Officer Martin Richenhagen said in a statement.
“Despite softening market demand in the fourth quarter, we made solid progress with both inventory reduction and our expense savings program,” Richenhagen said.
AGCO reported Tuesday that its revenue was down 13 percent in the fourth quarter to $2.5 billion, compared with the same period a year ago. Revenue was down nearly 16 percent in North America, 6 percent in the Europe/Africa/Middle East region and 2 percent in South America. Revenue was up nearly 13 percent, however, in the company’s Asia/Pacific region.
Net income fell to $76.5 million in the fourth quarter, compared with $136.9 million in the same period a year ago, or an adjusted earnings per share performance of $1.18, compared with $1.40 a year earlier.
Shares of AGCO, however, were up sharply Tuesday since results beat analysts’ expectations. Riding a wave of investor buying on a strong day for the stock market, AGCO’s shares ended the day up $4.25, at $48.96.
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