AGCO Corp (AGCO) to Report Q3 Earnings: What's in the Offing?
AGCO Corporation AGCO is scheduled to report third-quarter 2023 results on Oct 31, before the opening bell.
A Peek at 2Q23 Results
In the last reported quarter, AGCO’s sales and earnings surpassed the Zacks Consensus Estimate. The bottom and top lines increased year over year. The company has a trailing four-quarter earnings surprise of 16.4%, on average.
AGCO Corporation Price and EPS Surprise
AGCO Corporation price-eps-surprise | AGCO Corporation Quote
Which Way Are Estimates Trending?
The Zacks Consensus Estimate for AGCO’s earnings per share is pegged at $3.25 for the third quarter, suggesting growth of 2.2% from the year-ago reported figure. The Zacks Consensus Estimate for total revenues is pinned at $3.47 billion, indicating a year-over-year increase of 11.1%.
Let’s see how things have shaped up before the announcement.
Key Factors to Consider
AGCO is likely to have gained from demand across all the major global markets in the July-September quarter, owing to favorable farm economics. Healthy farm income across most major agricultural production regions, with elevated crop prices, bodes well for the company. This is likely to have also helped offset the impacts of higher fuel, fertilizer and other input costs.
AGCO Corp has been experiencing strong demand for its Precision Agriculture Business , technology-rich Fendt full lineup of equipment and replacement parts. This is expected to have persisted in the to-be-reported quarter. AGCO is also benefiting from increased sales of tractors and precision planting equipment, along with the effects of pricing that are mitigating inflationary cost pressure.
Demand and increased sales of higher horsepower units have been strong and helped offset the impacts of the decline in sales of smaller tractors in the second quarter of 2023. The momentum is expected to have continued in the September-end quarter.
However, AGCO has been experiencing significant component shortages due to supply-chain tightness, which is impacting production levels and unit shipments. Material cost inflation and higher engineering expenses are also likely to have impacted the company’s quarterly performance. Moreover, AGCO Corp has been facing the impacts of currency translation. We expect currency translation to have an impact of 1% on third-quarter sales.
Segmental Projections
We expect the North America segment’s sales to increase 11.8% to $1,018 million in the third quarter of 2023. Our prediction for the segment’s operating income is pegged at $79.6, indicating a year-over-year drop of 29.4%.
Our model predicts the South America segment’s sales to rise 8% year over year to $617 million in the quarter. We expect the segment’s operating income to increase 8.5% to $116.7 million.
We expect the EME (Europe/Middle East) segment’s sales to improve 14.5% year over year to $1,591 million in the third quarter of 2023. Our prediction for the segment’s operating income is pegged at $204.7, indicating a year-over-year increase of 44%.
The Asia/Pacific segment’s sales are expected to fall 5.3% year over year to $238 million in the September-end quarter. We expect operating income to fall 44.3% to $18.4 million.
Earnings Whispers
Our proven model conclusively predicts an earnings beat for AGCO Corp this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. That is precisely the case here.
You can uncover the best stocks before they’re reported with our Earnings ESP Filter.
Earnings ESP: The Earnings ESP for AGCO Corp is +2.97%.
Zacks Rank: AGCO currently carries a Zacks Rank #3.
Price Performance
AGCO Corp’s shares have lost 1.9% in the past year compared with the industry’s decline 6.1%.
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Other Stocks to Consider
Here are some other stocks with the right combination of elements to post an earnings beat in their upcoming releases.
Kubota Corporation KUBTY, expected to release earnings on Nov 8, has an Earnings ESP of +4.20% and sports a Zacks Rank of 1 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for KUBTY’s earnings for the third quarter is pegged at $1.19 per share. The consensus estimate for earnings has moved 2% north in the past 60 days. It has an average trailing four-quarter earnings surprise of 12.7%.
ESAB Corporation ESAB, scheduled to release earnings on Nov 1, has an Earnings ESP of +1.06% and a Zacks Rank of 3 at present.
The Zacks Consensus Estimate for ESAB’s third-quarter earnings is pegged at 92 cents per share. Earnings estimates have been unchanged in the past 60 days. It has an average trailing four-quarter earnings surprise of 13.6%.
Ingersoll Rand Inc. IR, expected to release earnings on Nov 1, currently has an Earnings ESP of +0.36% and a Zacks Rank of 3.
The consensus estimate for Ingersoll Rand’s earnings for the third quarter is pegged at 70 cents per share. Earnings estimates have been unchanged in the past 60 days. It has an average trailing four-quarter earnings surprise of 14.9%.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.
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AGCO Corporation (AGCO) : Free Stock Analysis Report
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ESAB Corporation (ESAB) : Free Stock Analysis Report
