Agco raises forecast on strong farm demand

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Agco Corp, the maker of Massey Ferguson tractors, raised its full-year outlook after strong demand in the Americas helped push its first-quarter results above Wall Street estimates.

The company, which also makes Challenger Fendt and Valtra tractors, raised its per-share 2013 earnings forecast for 2013 to $5.50-$5.70 from $5.10-$5.35 and its sales forecast by $300 million to $10.5 billion to $10.7 billion.

"Industry demand in North America continues at high levels, driven by strong farm income in 2012," Agco Chief Executive Martin Richenhagen said in a statement.

"Farmer planting intentions are near record levels."

A year after the worst drought in more than half a century, farmers in the United States are expected to plant corn this year on 97.3 million acres, the biggest area since 1936, the U.S. Department of Agriculture has said.

North and South America together accounted for about 45 percent of Agco's sales in the first quarter.

The company said its revenue rose 5.7 percent to $2.40 billion during the quarter ended March. Excluding currency impact, sales were up about 8.4 percent.

Net income fell slightly to $117.1 million, or $1.19 per share, from $121.2 million, or $1.21 per share, a year earlier.

Analysts on average had expected earnings of 88 cents per share on revenue of $2.25 billion, according to Thomson Reuters I/B/E/S.

Agco's shares were up 5 percent at nearly $53.61 in early trading on Tuesday.

They had gained about 4 percent between the start of the year and Monday's close on the New York Stock Exchange.



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