The tractor manufacturer AGCO, which consists of brands such as Challenger, Fendt, GSI, Massey Ferguson and Valtra, reported its results for the second quarter ending June 30, 2021.
Net sales for the second quarter were approximately $2.9 billion, an increase of approximately 43.5% compared to the second quarter of 2020.
Reported net income was $3.73/share for the second quarter of 2021, and adjusted net income, which excludes restructuring expenses and the reversal of a valuation allowance previously established against the company’s deferred tax assets in the United States, was $2.88/share.
Net sales in the second quarter of 2021 increased approximately 34.6% compared to the second quarter of 2020.
Net sales for the first six months of 2021 were approximately $5.3 billion, an increase of approximately 33.6% compared to the same period in 2020.
Excluding favorable currency translation impacts of approximately 6.3%, net sales for the first six months of 2021 increased approximately 27.3% compared to the same period in 2020.
For the first six months of 2021, reported net income was $5.71/share, and adjusted net income, excluding restructuring expenses and the aforementioned reversal of a valuation allowance was $4.89/share.
These results compare to reported net income of $1.78/share, and adjusted net income, excluding restructuring expenses and a non-cash impairment charge, of $1.97/share for the first six months of 2020.
'Strong margin performance' for AGCO
“Our second quarter results were highlighted by strong margin performance across all regions resulting in the achievement of record earnings per share,” said Eric Hansotia, AGCO’s chairman, president and chief executive officer.
“Focused execution and proactive pricing actions by the AGCO team mitigated the impact of the difficult supply chain environment, which was compounded by escalating material cost inflation.
"Our second quarter sales and production were up significantly from the second quarter of last year when extended Covid-related shutdowns in both Europe and South America interrupted our operations.
"Favorable farm economics are supporting increases in replacement demand and market response to our technology-focused products remains extremely positive.
"In particular, strong growth in Fendt high-horsepower tractors, Precision Planting products and our global parts business contributed to the margin expansion.
With order boards significantly ahead of last year, we have further increased our net sales and earnings forecast for 2021.
"AGCO’s focused investments in premium technology, smart farming solutions and enhanced digital capabilities support our farmer-first strategy to profitably grow the business and earn high returns for its stockholders.”