AGCO Corp. (NYSE: AGCO) reported Q1 EPS of $1.03, $0.27 better than the analyst estimate of $0.76. Revenue for the quarter came in at $2.3 billion versus the consensus estimate of $2.2 billion.

“AGCO performed well in the first quarter with relatively flat sales and stable gross margins compared to the first quarter of 2013, despite softer market conditions and a weaker product mix across most of the global markets,” stated Martin Richenhagen, Chairman, President and Chief Executive Officer. “We are focusing our efforts on increasing productivity and reducing material costs throughout our operations to offset these market headwinds. We also demonstrated our commitment to return cash to stockholders by making meaningful progress with the $500 million share repurchase program announced in December of 2013.”

Outlook

Global industry demand is expected to soften in 2014 compared to 2013. Modest declines are anticipated for Western Europe and North America with more pronounced declines in South America. AGCO is targeting earnings per share of approximately $6.00 for the full year of 2014. Net sales are expected to range from $10.8 billion to $11.0 billion. Gross margin improvement is expected to be partially offset by increased engineering expenditures to meet Tier 4 final emission requirements and market development expenses. The consensus is $5.49 and $10.43 billion, respectively.

“We remain on track to meet our 2014 financial targets and make meaningful progress toward our strategic initiatives,” continued Mr. Richenhagen. “We will maintain our focus on improving profitability and reducing working capital throughout 2014, while also making significant investments targeted at increasing productivity in our factories and delivering high-tech solutions that help farmers improve their efficiency and productivity. We are also forecasting another year of solid cash generation after funding our growth investments.”

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