AGCO Guides Strong in 2Q - Analyst Blog
03 Agosto 2011 - 6:01PM
Zacks
AGCO Corporation (AGCO) has reported fiscal
2011 second quarter results, delivering an EPS of $1.36 versus 66
cents in the year-earlier quarter. The quarter noted some special
items, excluding which adjusted EPS amounted to $1.35 versus 66
cents in the year-ago quarter.
Total revenue in the reported quarter increased 35.3% year over
year to $2.4 billion. Included in the sales was a currency
translation impact of 12.9%, excluding which sales increased 22.4%
in the quarter.
The EAME region reported the highest improvement in sales of
about 39.5% on a year-over-year basis. The North American region
reported a 5% improvement in sales, while sales in South America
were more or less flat.
Costs and Margins
Cost of goods sold increased to $1870.3 million in the reported
quarter from $1421.9 million in the year-ago quarter. Gross profit
soared to $488.3 million from $321.1 million in the prior-year
quarter. Consequently, gross margins improved 230 basis points year
over year to 20.7%.
Selling, general and administrative expenses also increased to
$216.5 million, from $164.8 million in the year-ago quarter.
Operating income soared to $201.6 million from $96.5 million in the
year-earlier quarter, thereby expanding operating margins by 300
basis points year over year to 8.5%.
Financial Position
As of June 30, 2011, cash and cash equivalents declined slightly
to $573.1 million from $719.9 as of December 31, 2011.
As of June 30, 2011, the debt-to-capitalization ratio was 13.3%
compared with 9.4% as of March 31, 2011 and 14.3% as of December
31, 2010.
Cash from operations improved to $101.5 million at the end of
the second quarter versus $13.5 million at the end of the year-ago
period.
Outlook
The company expects farm equipment to continue driving results
in fiscal 2011. In Europe, market recovery is likely to drive the
results in a positive direction; while North American and South
American markets are expected to generate favorable results.
Based on this, AGCO is expecting adjusted EPS of $4.00 for
fiscal 2011; while net sales are expected in the range of $8.5
billion to $8.7 billion.
Our Take
With a full product line of farm equipment and a wide network of
dealers and distributors, we believe AGCO is well positioned, over
the long term, to capitalize on the need for increased food
production, driven by worldwide population growth. Moreover, the
company is also looking forward to expanding its operations in
high-growth emerging markets, which bodes well for future operating
performance. We currently have a Zacks #1 Rank (short-term Strong
Buy recommendation) on the stock.
AGCO Corporation is a leading manufacturer and distributor of
agricultural equipment and related replacement parts. Its product
line is categorized under five groups: tractors, replacement parts,
combines, application equipment/sprayers and other machinery.
The company operates in four geographical segments:
Europe/Africa/Middle East (EAME), South America, North America and
Asia-Pacific. AGCO competes with CNH Global NV
(CNH), Deere & Company (DE) and Kubota
Corporation (KUB).
AGCO CORP (AGCO): Free Stock Analysis Report
CNH GLOBAL NV (CNH): Free Stock Analysis Report
DEERE & CO (DE): Free Stock Analysis Report
KUBOTA CORP ADR (KUB): Free Stock Analysis Report
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