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UPDATE 1-Agco could top first-quarter earnings forecast-CEO
April 14, 2011 / 9:36 PM / 7 years ago

UPDATE 1-Agco could top first-quarter earnings forecast-CEO

* Agco may top earnings outlook-CEO

* Says cash-rich farmers likely to invest in equipment

By Kyle Peterson and Michael Hirtzer

CHICAGO, April 14 (Reuters) - Farm equipment maker Agco Corp (AGCO.N) may top its own first-quarter earnings outlook when it reports the results later this month, the company’s chief executive said on Thursday.

“I think everything is pretty much in line,” Agco Chief Executive Martin Richenhagen told reporters in Chicago.

“I would be astonished if we only made the guidance,” he said.

The company is due to report earnings on April 26 and has forecast a profit of 25 cents to 30 cents per share.

Agco is the world’s third-largest maker of tractors and combines and sells its equipment under the Massey Ferguson, Fendt, Valtra and Agco brand names, among others. Based in Duluth, Georgia, the company traces its roots to the Allis-Chalmers Manufacturing Co.

Richenhagen declined to give an updated forecast for sales, citing the quiet period ahead of earnings. But he said soaring commodity prices and good farm incomes would stimulate sales of equipment used to gather crops.

“The overall market environment is good,” he said. “Commodity prices are rather high, which means farm income is rather good. And that means, of course, that farmers have the means of investment.”

Corn futures Cc1 climbed to a record $7.83-3/4 per bushel on Monday, and farmers are expected to respond to the high prices by planting the second-largest corn area since World War Two.

Overall, plantings of the eight major U.S. crops are expected to increase to 254.8 million acres this year, up 3.5 percent from last year and the most since 1998.

Richenhagen said an earthquake and tsunami in Japan last month has not disrupted the company’s operations as it did for other manufacturers with suppliers there.

“For us, it’s not material,” he said.

“We lost, of course, customers. And customers lost product,” he said.

Shares of Agco closed up $1.03, or about 2 percent, at $51.43 on the Nasdaq. (Reporting by Kyle Peterson and Michael Hirtzer)

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