Two major farm equipment manufacturers on Thursday reported sharply lower sales as the farm economy continues to struggle and tariffs create uncertainty in the marketplace.
First-quarter earnings at farm equipment manufacturer AGCO surpassed Wall Street expectations despite a 30% sales drop, as the company says it’s trying to remain “nimble” in its approach due to the current trade outlook.
CNH Industrial N.V., meanwhile, reported consolidated net revenue of $3.8 billion for the quarter, a 21% drop from the same period in 2024, and earnings per share of 10 cents, down from 29 cents a year ago. Its stock price increased, as well.
“We expect demand to be meaningfully lower in 2025 compared to 2024,” Damon Audia, AGCO senior vice president and CFO, said on an earnings call with investors today. “Despite net farm income forecast revising higher related to government aid, farmers are delaying equipment purchases due to still-elevated input costs and uncertain export demand, causing tighter profit margins.”
AGCO CEO Eric Hansotia said in a statement, “As we look around the world, the U.S. may face reduced market access for key exports, while South America is likely to ship more to China. Although U.S. net farm income forecasts have been revised higher on government aid, increased subsidies are not expected to boost demand for farm equipment in the near term.”
Audia said that tariffs “are creating significant demand uncertainty and increased cost for us” and said the company’s full-year guidance only accounts for tariffs now in effect in the company's global markets, “and our anticipated plans to mitigate them through potential pricing actions or cost mitigation actions.”
The potential for retaliatory measures or additional U.S. tariffs, particularly targeting the European Union, “could influence our current outlook,” he said. “We're closely monitoring these developments and remain nimble in our approach.”
AGCO’s earnings per share came in at 41 cents for the quarter, well above analyst estimates of 3 cents. The sales decrease to $2.1 billion was also slightly above analyst estimates. In trading Thursday morning, the company’s share price surged nearly 10% from Wednesday’s close of $84.83, to above $93/share.
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The company reaffirmed its projected net sales for 2025 will be about $9.6 billion, “reflecting lower sales volumes and assumed actions to mitigate tariff impacts,” according to a press release. It also kept its projected earnings per share range at $4 to $4.50.
Audia said structural changes and initiatives to reduce costs make the outlook achievable. “We're still projecting 2025 to be the bottom of the trough,” he said.
Sales were down across the globe, but varied significantly depending on the region. In North America, sales decreased 33.9% in the first three months of 2025, while in South America they were down 6.1%. In Europe and the Middle East, they declined 23%, and in the Asia/Pacific/Africa region, they fell 38%.
The company nevertheless remains bullish on Brazil, CEO Eric Hansotia said. “We think it's one of the most critical growth markets in global agriculture,” he said, noting the capacity to grow two or even three crops a year.
When it comes to tariffs, Audia said AGCO is looking to control costs as much as possible but also is considering price increases for some equipment. In February, the company said it had raised prices for parts to absorb a 7% increase in production costs
“Some of the products that we brought in from Europe, we're looking at things like bonded warehouses now to minimize the price effects,” Audia said
He added that the company is discussing cost mitigation with suppliers. “Like most large industrials, we’re pulling every lever out there … to mitigate the cost given the dynamic situation we're in right now.”
CNH also saw its stock rise more than 8% after its EPS beat analysts’ estimates by a cent.
But the impact of tariffs looms. “In addition to the lower cyclical industry sales, [CNH] has been evaluating multiple potential global trade scenarios,” the company’s earnings press release said. “The uncertainty of those scenarios, including the amount and duration of tariffs levied, the policy reactions of U.S. trading partners, and the impact to our end customers, may affect our forecast for the year.”
The company is forecasting 2025 global industry retail sales will be lower by 12% to 20% in both the agriculture and construction equipment markets when compared to 2024. CNH also is focusing on “driving down excess channel inventory primarily by producing fewer units than the retail demand level.”
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