AGCO (US:AGCO) ZACKSยท2025-05-08 17:40Core Viewpoint - AGCO Corp reported a significant decline in net sales and earnings in Q1 2025, but the stock has gained 11% since the earnings announcement on May 1, indicating market optimism despite the poor performance metrics [1][2]. Financial Performance - Adjusted EPS for Q1 2025 was 41 cents, down from $2.32 in the prior-year quarter, exceeding the Zacks Consensus Estimate of 3 cents [1] - Net sales decreased by 30% year over year to $2.05 billion, beating the Zacks Consensus Estimate of $2.02 billion; excluding currency impacts, the decline was 27.6% [2] - Cost of sales fell 29.1% year over year to $1.53 billion, while gross profit decreased 32.4% to $521 million, resulting in a gross margin of 25.4%, down from 26.3% a year ago [2] Operating Expenses and Margins - Selling, general and administrative expenses were $326 million, down from $350 million in the prior-year quarter; adjusted income from operations fell 70.3% to $83 million, with an operating margin of 4.1% compared to 9.6% a year earlier [3] Segment Performance - North America segment sales dropped 34.2% to $396 million, resulting in an operating loss of $19.8 million [3] - South America segment sales decreased 15.8% to $230 million, with operating income falling to $2 million [4] - EME segment sales were $1.33 billion, down from $1.71 billion, but exceeded estimates; operating income was $154 million, down from $295 million [5] - Asia/Pacific segment sales fell 36% to $94.5 million, resulting in an operating loss of $2.7 million [6] Cash Flow and Guidance - Cash and cash equivalents decreased to $563 million as of March 31, 2025, from $613 million at the end of 2024; net cash used in operating activities was $212 million [7] - AGCO expects net sales of $9.6 billion for 2025, projecting an EPS of $4.00-$4.50, anticipating lower sales volumes but planning to mitigate tariff impacts [8] Stock Performance - AGCO shares have lost 16% over the past year, contrasting with the industry's growth of 14.1% [10]