Agricultural equipment maker AGCO Corp. (AGCO), Tuesday reported a better-than-expected rise in first-quarter earnings, helped by strong growth in Eastern and Western Europe, as well as in North America.
Moving forward, AGCO raised its outlook for the full year 2012. The company's shares moved up 7 percent in afternoon trade on the New York Stock Exchange.
AGCO recorded a 26.5 percent growth in revenue in its first quarter, helped by sales in Europe, Africa, and the Middle East region that rose 23.3 percent from last year, and strong growth in Western and Eastern Europe.
Sales in North America surged 57.6 percent, aided by the GSI Holdings Corp. acquisition and growth in sales of sprayer equipment. AGCO last October agreed to acquire GSI Holdings from affiliates of private equity Centerbridge Partners L.P. for $940 million.
In Asia Pacific region, which accounts for a small part of AGCO's business, sales were up nearly 68 percent.
Commenting on the results, AGCO Chief Executive Officer Martin Richenhagen said, "We capitalized on improved demand in key Western European markets and continued market strength in North America while executing against our important margin improvement initiatives..."
Duluth, Georgia-based AGCO reported first-quarter net income of $120 million or $1.21 per share, compared to $80 million or $0.81 per share last year.
On average, 15 analysts polled by Thomson Reuters expected earnings of $0.86 per share for the quarter. Analysts' estimates typically exclude special items.
Revenue for the quarter was $2.27 billion, compared to $1.8 billion last year. Analysts expected revenue of $2.06 billion for the quarter.
AGCO now expects full year 2012 adjusted earnings of $5.5 per share and revenue in the range of $10.2 billion to $10.5 billion. Analysts currently expect earnings of $5.07 per share, on revenue of $9.91 billion for the year.
The company earlier projected 2012 earnings of about $5 per share and revenue of $10 billion.
CEO Richenhagen said, "We will maintain our focus on improving profitability throughout 2012, while also increasing our investments to support our longer term objectives. These investments include an expansion at our Fendt manufacturing facility in Marktoberdorf, Germany and construction of the low horsepower production facility in China..."
AGCO is trading on the NYSE at $49.97, up $3.40 or 7.30%, on a volume of 1.6 million shares. In the past year, the stock traded in a range of $30.11 - $59.22.
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