Farm equipment maker AGCO Corp (AGCO.N) posted a lower-than-expected quarterly profit and cut its full-year forecast on Wednesday, saying the massive drought in the United States this past summer has dented sales of machines that process large amounts of grain.
The news sent the company's shares down nearly 4 percent in morning trading.
The worst U.S. drought in more than 50 years harmed the corn crop last summer, crimping demand for the tractors and combines made by AGCO and rival Deere & Co (DE.N).
While most farmers had crop insurance, which meant their income did not suffer due to low yields, sales of machines that store and process large volumes of corn and other grains are down.
AGCO now expects to earn $5.20 per share this year, down from a previous estimate of $5.50 to $5.75. Analysts on average are expecting $5.71, according to Thomson Reuters I/B/E/S.
"While we don't expect any lasting impacts from the drought, we are experiencing softness in demand for grain storage and protein production equipment as a result of lower crop production volumes," AGCO Chief Executive Officer Martin Richenhagen said.
For the third quarter, the company reported net income of $94.5 million, or 96 cents per share, compared with $84.4 million, or 87 cents per share, a year earlier.
Analysts on average had expected earnings of $1.02 per share.
Revenue rose 9 percent to $2.29 billion. Analysts had expected $2.38 billion.
AGCO also cut its revenue forecast. It now expects $9.8 billion to $10 billion for 2012, down from a previous outlook of $10.1 billion to $10.3 billion. Analysts are expecting $10.07 billion.
Shares of Duluth, Georgia-based AGCO were down 3.7 percent at $45.81 on the New York Stock Exchange. Trading volume was light as the exchange reopened after Hurricane Sandy, with roughly 151,000 shares of AGCO changing hands, compared with average daily volume of 1 million.
(Reporting by Ernest Scheyder; Editing by Bernadette Baum, Dale Hudson and Lisa Von Ahn)