Agco Says Latin American Sales May Fall By 30% In 2009
09 Fevereiro 2009 - 1:38PM
Dow Jones News
Agco Corp. (AG) warned that industrywide farm-equipment sales in
South America could fall by almost a third this year due to drought
and tough credit conditions.
The U.S. company is a market leader in the region, and weaker
sales there and in western Europe prompted Agco to trim its 2009
profit and revenue outlook as it reported a 26% rise in
fourth-quarter earnings Monday.
Agco forecast tractor and combine sales to South America will
fall by 20% to 30% this year, worse than the forecast of a 10% to
20% decline made last November by rival Deere & Co. (DE).
The region has been a key growth driver for the farm-equipment
sector, which had been riding high on record commodity prices.
Tractor sales in Brazil and Argentina climbed 30% last year, with
combines up 50%.
Agco expects sales across the industry to fall in every major
region this year, with North America down 5% compared with 2008 and
Europe off 5% to 10%, led by declines in central Europe and
Russia.
Adverse currency movements are also expected to hurt Agco,
wiping $800 million to $900 million from 2009 revenue. The company
trimmed its revenue estimate to $7.5 billion to $7.8 billion from a
prior estimated midpoint of $7.75 billion.
It cut the top end of earnings estimate to $3 to $3.25 a share
from $3 to $3.50 a share.
Agco still expects to push through an average 4% price rise this
year despite the weaker demand and lower raw-material costs, which
had been soaring.
Net profit for the fourth quarter beat analysts' expectations,
rising to $102 million, or $1.08 a share, from $81.1 million, or 82
cents a share, a year earlier. Analysts on average expected
earnings of $1.01 a share, according to Thomson Reuters.
Shares of Agco traded recently at $25.09, up 5 cents.
-By Doug Cameron, Dow Jones Newswires; 312-750-4135;
doug.cameron@dowjones.com