Agco Corp. (AGCO, Financial) filed Quarterly Report for the period ended 2009-09-30.
AGCO CORP. is engaged in the manufacturer and distribution of farm equipment machinery and replacement parts in the United States and Canada. Products include tractors combines hay tools and forage equipment and implements. Agco Corp. has a market cap of $2.74 billion; its shares were traded at around $29.59 with a P/E ratio of 13.4 and P/S ratio of 0.3.
Net sales for the third quarter of 2009 were $1,403.7 million compared to $2,085.4 million for the same period in 2008. Net sales for the first nine months of 2009 were $4,777.9 million compared to $6,267.4 million for the prior year period. Foreign currency translation negatively impacted net sales by approximately $103.3 million, or 5.0%, in the third quarter of 2009 and by $622.1 million, or 9.9%, in the first nine months of 2009. The following table sets forth, for the three and nine months ended September 30, 2009 and 2008, the impact to net sales of currency translation by geographical segment (in millions, except percentages):
Gross profit as a percentage of net sales decreased during the third quarter and the first nine months of 2009 compared to the prior year primarily due to lower production volumes and a weaker sales mix, partially offset by the impact of reduced workforce levels and cost control initiatives. Sales mix impacted margins primarily in South America due to a shift in demand to low horsepower tractors away from high horsepower tractors and combines. Unit production of tractors and combines during the third quarter and first nine months of 2009 was approximately 31% and 24% lower, respectively, than the comparable periods in 2008. Production for the remainder of 2009 is expected to be significantly below 2008 levels, which will negatively impact sales and gross margins during the fourth quarter of 2009 compared to the same period in 2008. We recorded approximately $0.1 million and $0.6 million of stock compensation expense, within cost of goods sold, during the third quarter and first nine months of 2009, respectively, compared to $0.3 million and $0.7 million, respectively, of stock compensation expense for the comparable periods in 2008, as is more fully explained in Note 4 to our Condensed Consolidated Financial Statements.
Other expense, net was $5.7 million and $20.5 million during the third quarter and first nine months of 2009, respectively, compared to $2.9 million and $18.5 million, respectively, for the same periods in 2008. Losses on sales of receivables, primarily under our securitization facilities, were $1.5 million and $11.7 million in the third quarter and first nine months of 2009, respectively, compared to $7.2 million and $21.6 million, respectively, for the same periods in 2008. The decrease was primarily due to a reduction in interest rates in 2009 compared to 2008. In addition, there were foreign exchange losses in the third quarter and first nine months of 2009 compared to foreign exchange gains in the same periods in 2008.
Equity in net earnings of affiliates was $7.0 million for the third quarter of 2009 compared to $8.6 million for the comparable period in 2008. For the first nine months of 2009, equity in net earnings of affiliates was approximately $28.9 million compared to $32.2 million for the same period in 2008.
as of December 31, 2008. The total finance portfolio in our retail finance joint ventures was approximately $5.8 billion and $4.8 billion as of September 30, 2009 and December 31, 2008, respectively. The total finance portfolio as of September 30, 2009 included approximately $5.5 billion of retail receivables and $0.3 billion of wholesale receivables from AGCO dealers. The total finance portfolio as of December 31, 2008 included approximately $4.6 billion of retail receivables and $0.2 billion of wholesale receivables from AGCO dealers. The wholesale receivables were either sold to AGCO Finance without recourse from our operating companies or AGCO Finance provided the financing directly to the dealers. For the first nine months of 2009, our share in the earnings of the retail finance joint ventures, included in Equity in net earnings of affiliates on our Condensed Consolidated Statements of Operations, was $25.2 million compared to $24.4 million for the same period in 2008.
Read the The complete ReportAGCO is in the portfolios of David Williams of Columbia Value and Restructuring Fund, Kenneth Fisher of Fisher Asset Management, LLC.
AGCO CORP. is engaged in the manufacturer and distribution of farm equipment machinery and replacement parts in the United States and Canada. Products include tractors combines hay tools and forage equipment and implements. Agco Corp. has a market cap of $2.74 billion; its shares were traded at around $29.59 with a P/E ratio of 13.4 and P/S ratio of 0.3.
Highlight of Business Operations:
For the three months ended September 30, 2009, we generated net income of $11.1 million, or $0.12 per share, compared to net income of $99.0 million, or $1.01 per share, for the same period in 2008. For the first nine months of 2009, we generated net income of $102.2 million, or $1.09 per share, compared to net income of $287.4 million, or $2.91 per share, for the same period in 2008.Net sales for the third quarter of 2009 were $1,403.7 million compared to $2,085.4 million for the same period in 2008. Net sales for the first nine months of 2009 were $4,777.9 million compared to $6,267.4 million for the prior year period. Foreign currency translation negatively impacted net sales by approximately $103.3 million, or 5.0%, in the third quarter of 2009 and by $622.1 million, or 9.9%, in the first nine months of 2009. The following table sets forth, for the three and nine months ended September 30, 2009 and 2008, the impact to net sales of currency translation by geographical segment (in millions, except percentages):
Gross profit as a percentage of net sales decreased during the third quarter and the first nine months of 2009 compared to the prior year primarily due to lower production volumes and a weaker sales mix, partially offset by the impact of reduced workforce levels and cost control initiatives. Sales mix impacted margins primarily in South America due to a shift in demand to low horsepower tractors away from high horsepower tractors and combines. Unit production of tractors and combines during the third quarter and first nine months of 2009 was approximately 31% and 24% lower, respectively, than the comparable periods in 2008. Production for the remainder of 2009 is expected to be significantly below 2008 levels, which will negatively impact sales and gross margins during the fourth quarter of 2009 compared to the same period in 2008. We recorded approximately $0.1 million and $0.6 million of stock compensation expense, within cost of goods sold, during the third quarter and first nine months of 2009, respectively, compared to $0.3 million and $0.7 million, respectively, of stock compensation expense for the comparable periods in 2008, as is more fully explained in Note 4 to our Condensed Consolidated Financial Statements.
Other expense, net was $5.7 million and $20.5 million during the third quarter and first nine months of 2009, respectively, compared to $2.9 million and $18.5 million, respectively, for the same periods in 2008. Losses on sales of receivables, primarily under our securitization facilities, were $1.5 million and $11.7 million in the third quarter and first nine months of 2009, respectively, compared to $7.2 million and $21.6 million, respectively, for the same periods in 2008. The decrease was primarily due to a reduction in interest rates in 2009 compared to 2008. In addition, there were foreign exchange losses in the third quarter and first nine months of 2009 compared to foreign exchange gains in the same periods in 2008.
Equity in net earnings of affiliates was $7.0 million for the third quarter of 2009 compared to $8.6 million for the comparable period in 2008. For the first nine months of 2009, equity in net earnings of affiliates was approximately $28.9 million compared to $32.2 million for the same period in 2008.
as of December 31, 2008. The total finance portfolio in our retail finance joint ventures was approximately $5.8 billion and $4.8 billion as of September 30, 2009 and December 31, 2008, respectively. The total finance portfolio as of September 30, 2009 included approximately $5.5 billion of retail receivables and $0.3 billion of wholesale receivables from AGCO dealers. The total finance portfolio as of December 31, 2008 included approximately $4.6 billion of retail receivables and $0.2 billion of wholesale receivables from AGCO dealers. The wholesale receivables were either sold to AGCO Finance without recourse from our operating companies or AGCO Finance provided the financing directly to the dealers. For the first nine months of 2009, our share in the earnings of the retail finance joint ventures, included in Equity in net earnings of affiliates on our Condensed Consolidated Statements of Operations, was $25.2 million compared to $24.4 million for the same period in 2008.
Read the The complete ReportAGCO is in the portfolios of David Williams of Columbia Value and Restructuring Fund, Kenneth Fisher of Fisher Asset Management, LLC.
