AGCO Q3 2026 sales fall 8.6% as key farm markets weaken

AGCO reported third-quarter 2026 net sales of $2.26 billion, down 8.6% from a year earlier, as weaker demand in Europe and Latin America outweighed growth in North America and Asia-Pacific. The agricultural machinery maker posted adjusted earnings of $1.05 per share, compared with $1.35 in the third quarter of 2025.

Reported earnings were $0.75 per share, against $4.09 a year earlier. The prior-year comparison includes a gain on the sale of an investment in an affiliate, which contributed $2.93 per share to AGCO’s nine-month 2025 adjusted-to-reported earnings reconciliation. Excluding a favorable 0.1% currency effect, third-quarter sales declined 8.7%.

The results reflect a difficult market for farm equipment manufacturers. AGCO Chairman, President and CEO Eric Hansotia said elevated input costs and uncertainty over commodity markets and trade had pushed industry demand below the previous cyclical trough. The company said it had aligned production with demand, managed dealer inventories and maintained cost discipline.

AGCO Q3 2026 results show regional demand diverging

Europe and the Middle East remained AGCO’s largest region, generating $1.31 billion in third-quarter sales. Revenue fell 19.1% year over year, or 18.1% excluding currency effects. The company attributed the decline mainly to weaker equipment demand in Germany, France, Italy and Spain. Regional operating income was $115.1 million lower than a year earlier.

Latin American sales fell 15.4% to $292.3 million, with the decline reaching 19.1% on a constant-currency basis. AGCO cited softer demand for equipment and lower production volumes. Farmers in Brazil faced higher interest rates, tighter credit conditions and weak farm economics, factors that delayed purchases, the company said.

North America provided the strongest offset. Sales rose 34.8% to $485.3 million, or 35.1% excluding currency effects, supported by higher unit sales across most equipment categories, particularly high-horsepower and mid-range tractors and parts. The region recorded operating income of $13.8 million, compared with an operating loss of $42 million in the same quarter of 2025. AGCO said the improvement reflected higher sales and production volumes and about $13 million in tariff refunds recognized during the quarter.

Sales in Asia-Pacific-Africa increased 13.8% to $178.8 million, equivalent to 9.2% growth at constant currency. Higher sales in Australia partly offset lower sales in several Asian and African markets. Regional operating income increased by $17.2 million, supported by higher sales and a favorable product mix.

Weak equipment purchases point to continued pressure

Industry retail data cited by AGCO show tractor sales fell 9% in North America during the first nine months of 2026, while combine sales declined 10%. In Brazil, tractor sales dropped 17% and combine sales fell 38%. Western European tractor sales edged down 1% over the nine-month period, although the third quarter alone was 9% lower than a year earlier.

AGCO said softer crop economics, elevated input costs and weather-related yield variability had constrained purchasing in Western Europe. In North America, commodity prices and uncertainty around trade and export demand continued to influence farm profitability. The company expects equipment demand in the region to remain below historical mid-cycle levels through the end of 2026.

Lower farm income is also central to AGCO’s outlook for the rest of the year. Hansotia said the company was focusing on products intended to reduce operating costs, including fuel-efficient tractors, AI-enabled targeted spraying systems and autonomous equipment. Through its PTx business, AGCO is also offering automation and other technology that can be installed on existing machinery from different manufacturers, allowing farmers to add capabilities without replacing an entire machine.

AGCO keeps 2026 earnings outlook at about $5.50

AGCO expects full-year 2026 net sales of $9.8 billion to $10 billion and an adjusted operating margin of about 7%. Its adjusted earnings-per-share outlook remains approximately $5.50. The company said production volumes would be aligned with dealer inventories and market demand, with pricing discipline and cost controls supporting margins.

The forecast reflects tariff policies in place as of October 29 and the company’s mitigation and sourcing measures. AGCO said changes in tariff policy or related responses could affect the estimates.

For the first nine months of 2026, AGCO generated $7.22 billion in sales, up 0.7% on a reported basis. After excluding a favorable 3.4% currency impact, revenue was down 2.7%. Adjusted earnings per share for the period increased to $3.42 from $3.11 a year earlier.

The outlook remains tied to a recovery in farm profitability and equipment demand. AGCO’s second-quarter results had already prompted the company to reduce its 2026 forecast as high farm costs delayed purchases. The latest regional figures indicate that the recovery remains uneven, with North America showing growth in AGCO’s own sales while retail industry volumes remain below year-earlier levels.

Source: AGCO