AGCO to acquire Laverda Plant

[Valtra01]

Originally Posted by skidooer

Good news guys. The AGCO Valtra ANTS is painted orange! I guess there's nothing left to talk about here.

I'm impressed! That would be a different way of farming indeed, wonder if I will live long enough to see it happen? Funny fact, the ANTS acronym is all of the letter identification they use for their tractor series put together as a single word, while I thought that was kind of funny.

[connor]

Originally Posted by masseypride

Connor,

Deere is saturating the market with the high priced low houred machines in attempt to keep new sales numbers up every year. That keeps their dumb stock holders with the thought that the company is on the roll. I was told they have two years worth of low houred combines sitting on the lots across the U.S. on Mother Deere floor plan. I'm sure Mother Deere is paying 5 to 6 % on billion in equipment just to impress customers like you. Not to mention sprayers, tractors, and other equipment they do. So you are going to see more expensive and bigger equipment year after year. That doesn't sound like solid business sense. What about the cost for the local dealer, Mother Deere and their customers because we all know someone has to pay for this. If interest rate would jump Deere would suffer dearly for their ungodly amount of equipment on their inventory. My long winded point is AGCO does not need billions in inventory sitting on lots all over the world. AGCO has chosen to use the money in Research and Development of the products currently in their stable. Futhermore, at the dealer level, Nick's doesn't need fifteen combines and ten tractors to impress their customer base. I would say two combines and three tractors from three different series is all that is necessary. I would like them to operate their business they same way I operate mine. Low overhead and maximize profits. End of Rant

Masseypride

And Deere still squashes Agco under its thumb in sales numbers and generated revenue. Obviously you're overlooking a vital compenent of Deeres strategy if you think they're doing something wrong. Agco compared to them looks like a bunch of confused monkeys running around trying to get plan together all the time. I've said it before Deere builds good equipment but I'm not impressed by any of it one bit. But they must be doing something right to have become an almost unstoppable force, I'll give them credit there. I'd like to see Agco cut into their customer base more and more but Agco has a lot to figure out and learn still.

[connor]

Originally Posted by skidooer

Key to what? Agco earns a net profit of around $60-100M per year. How much does your business make?

Agco does. But I wasn't talking about Agco. I was talking about Nicks. How much are they really making with their small handful of "oh so loyal customers"? If they're selling equipment like everybody claims they are then great for them, but where in the **** are they selling it? Sure don't seem to be finding too much anywhere. That kind of makes a guy wonder since a lot of you here are saying that Massey is THE force in farm machinery to reckon with these days. Until I actually see anything that supports these claims I'm not buying it.

[tellarian]

DOW JONES NEWSWIRES

Agco Corp.'s (AGCO) fourth-quarter profit more than doubled, but the company expects only a modest increase at best in worldwide demand for farm machinery this year.
Agco forecast this year's earnings will be $2.50 to $2.75 per share on $7.6 billion to $7.9 billion in sales. Analysts expect the company to earn $2.94 a share on $7.45 billion in sales.
Rising prices for farm commodities are providing farmers with more money to spend on equipment. But after strong sales growth in 2010, the Georgia company expects farmers to take a breather from purchases in some of Agco's key markets. Agco also warned that higher expenses for materials and a new emissions system for its engines will weigh on profit in 2011.
"We do expect most of the earnings improvement in the first half of the year and then level out to some extent," said Chief Financial Officer Andy Beck during a conference call with analysts Tuesday. "The thing that could be a question is the additional expenses and engineering expenses we expect in the second half" of the year.
Rival Deere & Co. (DE) offered a similarly cautious outlook in November. In South America, where Agco is the market leader in tractors, the company sees equipment demand softening as the Brazilian government scales back some of the loan assistance offered to farmers in recent years to purchase equipment. Fourth-quarter sales from South America rose 2.6% from a year earlier.
Meanwhile, in North America, Agco expects flat demand for machinery coming off strong sales levels in 2010. Agco sees modest improvement in demand in western Europe as farmers there benefit from rising prices for grain and dairy products.
Agco, the third largest farm machinery manufacturer behind Deere and CNH Global NV (CNH), reported that sales accelerated at the end of 2010, particularly in Europe and North America.
Fourth-quarter sales in Europe, the Middle East and Africa, which account for the largest share of Agco's sales, rose 20%. North America sales surged 49%, allowing the company to register its best operating margin from the region in a decade. For 2010, Agco's operating margin more than doubled from 2009 to 3.3%.
Agco, whose brands include Massey Ferguson and Challenger, reported an overall fourth-quarter profit of $85.2 million, or 87 cents a share, up from $33.5 million, or 35 cents a share, a year earlier. Excluding items such as restructuring charges, per-share earnings rose to 88 cents from 42 cents. Net sales climbed 19% to $2.17 billion and were up 23% excluding currency translation.
Analysts polled by Thomson Reuters anticipated earnings of 76 cents a share on $2.03 billion in sales.
Gross margin widened to 18.9% from 14.6% on higher production and rising sales of higher-priced machinery. But the company warned that gross margin improvement in 2011 would likely be offset by rising expenses for growth initiatives and new product launches. The company predicted its engineering expenses will rise 10% to 15% this year as the company complies with stricter U.S. standards for engine exhaust.
The company revealed it's likely to raise equipment prices in 2011 above the 2.5% increase anticipated at the start of the year to recover recent jumps in costs for steel, rubber and other materials used in machinery.
"Were evaluating our prices and we expect to increase prices in the second quarter to offset" the higher material expenses, Beck said.
For all of 2010, Agco's net income rose 62.4% from 2009 to $220.5 million, or $2.29 a share. Sales increased 5.8% to $6.9 billion.
Agco's stock was recently trading down 1.20% at $52.82 a share.
-By Bob Tita, Dow Jones Newswires; 312-750-4129; robert.tita@dowjones.com
(Matt Jarzemsky contributed to this report.)