We’ll start off by discussing the main activities of AGCO Corporation (NYSE:AGCO) and its future growth potential. AGCO is the largest agricultural manufacturer of machinery and equipment in the world. The company mainly produces and markets a portfolio of tractors, combines, hay tools, sprayers, and forage and tillage equipment in more than 140 countries worldwide. The shares of AGCO have grown by over 18% since the beginning of the current year and there are no signs that the stock will stop rising any time soon. Just recently, AGCO announced the launch of its first Future Farm and Learning Center in Africa. AGCO’s Future Farm is aimed at supporting sustainable food production systems and enhancing farm output by making more efficient use of agricultural resources. It is expected that Africa’s population will increase to two billion by 2050, therefore, the need for inclusive, sustainable mechanization and training will become greater in the area with the passage of time. Indeed, mechanization is the crucial element in enhancing agricultural productivity on the continent and AGCO can provide this mechanization. It seems that the company will not only have a positive impact on the local communities by providing employment and training, but will also unlock a large revenue stream for itself. The newly-initiated project on the African continent also aims to build new products for this region, support its current products , and satisfy its potential local customers through the company’s new logistics center in Johannesburg. Ultimately, the Future Farm project marks a big step towards a new future for AGCO, which will definitely assist its growth and development in the upcoming years.
Moving on to AGCO’s recent financial performance, we can clearly affirm that the company has been quite successful in delivering satisfactory financial results lately. Despite facing a weaker market demand and a stronger U.S. dollar, AGCO posted adjusted earnings per share of $0.43 that significantly outperformed the Zacks Consensus Estimate of $0.20. Nevertheless, the company reported revenues of $1.7 billion for the first quarter of 2015, which marks a decrease of 27% year-over-year. At the same time, the revenues figure didn’t meet the Zacks Consensus Estimate of $1.8 billion. The main reason behind this disappointing figure was the currency exchange rates; the currency translation decreased the net sales figure by 11.7%. Another figure from the company’s financial reports that is worth taking a look at is the selling, and general and administrative expenses. During the most recent quarter, those expenses came to $211 million, decreasing 21% year-over-year, which might signal that the company has become more operationally efficient. Robbins continues to be the largest shareholder of the company in our database, followed by Martin Whitman‘s Third Avenue Management, and Robert Rodriguez and Steven Romick‘s First Pacific Advisors.
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