Shares of AGCO Corp, a leading manufacturer of agricultural machinery, plummeted 5.15% on November 5, 2024, after the company reported weaker-than-expected third-quarter earnings and slashed its full-year guidance. The stock's decline reflects mounting concerns over softening demand for farm equipment amid challenging market conditions.

For the third quarter, AGCO reported adjusted earnings of $0.68 per share, significantly lower than analysts' expectations of $1.08 per share. Revenue fell 24.8% year-over-year to $2.6 billion, missing estimates of $2.9 billion. The disappointing results were primarily driven by lower sales volumes and production cuts as farmers became more cautious about purchasing new equipment.

AGCO lowered its full-year outlook, now expecting net sales of around $12 billion for 2024, down from its previous guidance of $12.5 billion. Adjusted earnings per share are projected to be approximately $7.50, compared to the previous estimate of $8.00. The company cited lower sales and production volumes, as well as increased cost controls and lower engineering investments, as factors contributing to the revised guidance.

According to AGCO's CEO Eric Hansotia, record harvests in the Northern Hemisphere have led to higher grain inventories, pressuring crop prices. Combined with elevated input costs, this has caused farmers and dealers to adopt a more conservative approach, delaying their equipment purchasing decisions. As a result, AGCO has been cutting production to reduce inventory levels.

The company's struggles reflect broader challenges facing the agricultural machinery industry. Industry data shows declines in retail tractor and combine sales across major markets such as North America, South America, and Western Europe in the first nine months of 2024. Lower projected farm incomes and a refreshed fleet of equipment are expected to further weigh on demand for the remainder of the year.