AGCO (NYSE: AGCO) reported net sales of $2.1 billion for the first quarter ended March 31, 2025, a decrease of 30.0% compared to the first quarter of 2024. Excluding unfavorable foreign currency translation of 2.4%, net sales in the quarter decreased 27.6% compared to the first quarter of 2024. Reported net income was $0.14 per share for the quarter and adjusted net income was $0.41 per share. These results compare to reported net income of $2.25 per share and adjusted net income of $2.32 per share for the first quarter of 2024.

Eric Hansotia, AGCO's Chairman, President and Chief Executive Officer, stated that AGCO performed well in the first quarter, positioning them to navigate global trade uncertainties and weak industry demand. The company made substantial progress in cost reduction efforts, reducing inventory by cutting production hours by approximately 33% year-over-year, which improved dealer inventory levels in North and South America.

AGCO is seeing a mix of positive signs and risks around the world, requiring them to remain agile as they execute their Farmer-First strategy. The underlying fundamentals in many parts of the world have begun to trend upward with farmer sentiment in Europe improving, U.S. corn prices rising and corn stocks-to-use-ratios at lower levels. However, the global agricultural equipment market is volatile due to tariffs and shifting export demand for grain.

First Quarter Highlights:

• Reported regional sales results: Europe/Middle East ("EME") (22.1)%, North America (34.2)%, South America (15.8)%, Asia/Pacific/Africa ("APA") (36.0)%
• Constant currency regional sales results: EME (20.6)%, North America (32.6)%, South America (4.2)%, APA (34.1)%
• Regional operating margin performance: EME 11.6%, North America (5.0)%, South America 0.9%, APA (2.9)%

Market Update:

Industry Unit Retail Sales:

• North America: Tractors (14)%, Combines (46)%
• Brazil: Tractors 11%, Combines (4)%
• Western Europe: Tractors (17)%, Combines (34)%

Hansotia noted that the U.S. may face reduced market access for key exports, while South America is likely to ship more to China. U.S. net farm income forecasts have been revised higher on government aid, but increased subsidies are not expected to boost demand for farm equipment in the near-term. Brazil's record soybean production and delayed corn planting highlight both growth potential and risks. Persistent rain and poor growing conditions have negatively impacted wheat production across Western Europe with reduced yields reported in several countries. Demand for new equipment has softened further in North America and Europe as a result of volatile crop producer demand.

Regional Results:

North American net sales decreased 33.9% due to softer industry sales and under-production of end-market demand, with the most significant declines in high-horsepower tractors, sprayers, and combines. Income from operations decreased $48.2 million, and operating margins were (5.0)% due to lower sales and production volumes.

South American net sales decreased 6.1% due to softer industry retail sales and under-production of retail demand, with lower sales of high-horsepower tractors and planters. Income from operations decreased by $9.9 million due to lower sales and production volumes as well as negative pricing.

Europe/Middle East net sales decreased 23.0% due to lower sales across most Western European markets, partially offset by growth in Spain and Eastern Europe. Declines were largest in high-horsepower and mid-range tractors as well as hay equipment. Income from operations decreased $140.7 million due to lower sales and production volumes.

Asia/Pacific/Africa net sales decreased 38.0% due to weaker end market demand and lower production volumes, with lower sales in Australia, Japan, and China. Income from operations decreased by $11.8 million primarily due to lower sales and production volumes.

Outlook:

AGCO's net sales for 2025 are expected to be approximately $9.6 billion, reflecting lower sales volumes and assumed actions to mitigate tariff impacts. Adjusted operating margins are projected to be 7% - 7.5%, reflecting the impact of lower sales, lower production volumes, increased cost controls and flat engineering expenses. Based on these assumptions, 2025 earnings per share are targeted at $4.00 - $4.50. These full-year estimates reflect the projected impact of tariffs in place as of May 1, 2025 across the Company's various jurisdictions along with our planned mitigation actions.