Executive Summary

Q4 2024 revenue was $2.89B, down 24% YoY, with adjusted EPS of $1.97 and adjusted operating margin of 9.9%; GAAP diluted EPS was $(3.42) due to a $364M goodwill impairment (largely PTx Trimble North America) and $131M restructuring and optimization expense .
Regional mix and parts supported margins: EME delivered 14.4% operating margin in Q4 while parts revenue reached ~$418M, up ~4% YoY; North America margin was 0.7% given volume cuts and higher discounts .
2025 outlook reaffirmed: revenue ~$9.6B, adjusted operating margin 7.0–7.5%, EPS $4.00–$4.50; Q1 2025 revenue ~ $2.0B with EPS ~breakeven as AGCO front-loads production cuts to accelerate dealer destocking .
Stock narrative catalysts: pace of dealer inventory normalization (NA ~9 months vs 6 target; SA ~5 vs 3) and realization of restructuring savings; monitoring PTx Trimble synergy ramp and any tariff developments flagged by management .

What Went Well and What Went Wrong

What Went Well
- Margin resiliency in a severe downturn: “Adjusted operating margin performance is by far our best performance in an industry downturn,” with Q4 adjusted OM at 9.9% and FY at 8.9% despite aggressive production cuts .
- Europe/Middle East execution: EME Q4 margin at 14.4%; CFO highlighted share gains, cost savings and “second highest level of earnings from the segment ever” despite volume pressure .
- Aftermarket and precision uptake: Parts revenue ~$418M in Q4, up ~4% reported and ~6% ex-FX; precision tech adoption strong (e.g., smart sprayer nozzle >50% Q4 take rate; >1,000 PTx dealers) .
What Went Wrong
- Top-line contraction: Q4 sales down 24% YoY and price modestly negative (~1%) amid broad end-market weakness; NA net sales down ~39% cc; APA and SA also sharply lower .
- GAAP losses driven by non-cash and strategic charges: $354.1M goodwill impairment (NA/PTx Trimble), and $507.3M loss on Grain & Protein divestiture contributed to Q4/FY losses .
- Channel inventory still elevated: Dealer inventory at ~9 months in NA (target 6) and ~5 months in SA (target 3); management plans to underproduce retail demand at least through 1H25 .

Financial Results

Headline results – sequential comparison (Q2–Q4 2024)

Metric	Q2 2024	Q3 2024	Q4 2024
Revenue ($B)	$3.25	$2.60	$2.89
Adjusted Operating Margin (%)	10.3%	5.5%	9.9%
Adjusted EPS ($)	$2.53	$0.68	$1.97
GAAP Diluted EPS ($)	$(4.92)	$0.40	$(3.42)

YoY comparison (Q4)

Metric	Q4 2023	Q4 2024
Revenue ($B)	$3.80	$2.89
Adjusted Operating Margin (%)	10.7%	9.9%
Adjusted EPS ($)	$3.78	$1.97
GAAP Diluted EPS ($)	$4.53	$(3.42)

Segment/Regional breakdown – Q4 2024

Region	Net Sales Q4’24 ($M)	Net Sales Q4’23 ($M)	YoY %	Operating Margin Q4’24
North America	546.8	891.7	(38.7)%	0.7%
South America	282.0	412.0	(31.6)%	10.8%
Europe/Middle East	1,882.8	2,259.0	(16.7)%	14.4%
Asia/Pacific/Africa	175.7	238.0	(26.2)%	3.0%
Total	2,887.3	3,800.7	(24.0)%	—

KPIs and operational indicators

KPI	Q4 2024	Context
Parts revenue	~$418M; up ~4% reported; ~6% ex-FX	Aftermarket resilience supported mix
Production hours	Q4: down ~33% YoY; FY24: down ~28% vs 2023	Front-loaded cuts to address inventory
Dealer inventories (months of supply)	Europe: just over 4; NA: ~9 (target 6); SA: ~5 (target 3)	Underproduce retail demand at least through 1H25

Non-GAAP adjustments – Q4 and FY

Q4 adjusted EPS $1.97 vs GAAP $(3.42), primarily reflecting add-backs for $364.2M impairment (NA/PTx Trimble), $131.0M restructuring, $25.5M transaction costs, and $9.5M loss on sale; prior-year Q4 included Argentina FX devaluation and a Swiss tax benefit .
FY24 adjusted EPS $7.50 vs GAAP $(5.69), adding back $507.3M loss on Grain & Protein divestiture, $369.5M impairments, $172.7M restructuring, $67.7M transaction costs and PTx Trimble amortization .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Net Sales	FY 2025	~$9.6B (12/19/24)	~$9.6B	Maintained
Adjusted Operating Margin	FY 2025	7.0%–7.5% (12/19/24)	7.0%–7.5%	Maintained
Adjusted EPS	FY 2025	$4.00–$4.50 (12/19/24)	$4.00–$4.50	Maintained
Effective Tax Rate	FY 2025	—	35%–38%	New/Specified
Engineering Expense	FY 2025	—	~Flat vs 2024	New/Specified
Capex	FY 2025	—	~$375M	New/Specified
Q1 Revenue	Q1 2025	—	~ $2.0B	New
Q1 EPS	Q1 2025	—	~Breakeven	New
Production Hours	FY 2025	—	Down ~15%–20%; Q1 down ~35%–40% YoY	New

Earnings Call Themes & Trends

Topic	Previous Mentions (Q2’24, Q3’24)	Current Period (Q4’24)	Trend
Production & Inventory	Q2: Lowered outlook; restructuring; “significant production cuts” to reduce AGCO/dealer inventories . Q3: Continued cuts; reaffirmed 9% FY adj OM .	Q4: Q4 hours down ~33%; plan to underproduce retail through at least 1H25 to bring NA (~9 months) and SA (~5 months) toward targets .	More aggressive destocking; front‑loaded cuts.
Precision Ag/PTx	Q2: PTx JV consolid., OutRun autonomy launch . Q3: Ongoing portfolio transition .	Q4: Goodwill impairment at PTx Trimble NA; >1,000 PTx dealers; 70%+ guidance take-rate on AGCO machines; cross-selling push in 2025 .	Strategic commitment intact; near-term margin/volume pressure.
Pricing & Mix	Q2: Mixed; OM supported by EME mix . Q3: Headwinds continue .	Q4: Pricing ~–1%; 2025 pricing 0–1% with regional nuances (e.g., Argentina tax change) .	Slight pricing headwind turning modestly positive in 2025.
Tariffs/Macro	Q2/Q3: Demand softness from farm income and input costs .	Q4: Tariff scenarios monitored; minor direct effect expected; retaliatory tariff risk could affect outlook .	Watching policy risk; nimble response planned.
Europe	Q2: EME mix helped margins . Q3: EME margin 6.4% .	Q4: EME margin 14.4%; BayWa restructuring progressing; parts strong; dealer inventory near target .	Stabilizing at higher margin baseline.

Management Commentary

“We delivered a strong 9.9% adjusted operating margin in Q4 and $1.97 in adjusted EPS, even as sales fell 24% and we cut production hours 33%...Our margin resiliency is clear evidence we’ve structurally improved the company through our transformation.” — Eric Hansotia, CEO .
“North America is likely to be negative margin in Q1 given the level of underproduction; Europe low double-digit, South America slightly negative, APA low single-digit.” — Damon Audia, CFO .
“There’s been a lot of progress...over 1,000 dealers and over 95% of acres covered with PTx technology...primary focus in 2025 is cross‑selling across full-line tech dealers.” — Eric Hansotia .
On PTx Trimble impairment: “DCF timing with 2024 drop and 2025 outlook pressured near-term JV sales/earnings, leading to a write-down; long-term plan and adoption unchanged.” — Damon Audia .

Q&A Highlights

Regional profitability cadence: Q1 2025 expected negative margin in North America and slightly negative in South America; Europe low double-digit; APA low single-digit, reflecting front-loaded underproduction to destock .
Dealer inventory normalization: Europe near target; SA likely into Q2 to progress; NA depends on sentiment and commodity prices—company remains aggressive in monitoring days on hand and units .
Pricing outlook: Slightly negative in Q1 due to European carryover and Argentina tax normalization; North America positive; full-year 2025 pricing still ~0–1% .
Cost actions: On pace for $100–$125M run-rate savings by YE25; additional $75M run-rate by YE26 from centers of excellence; discretionary levers available if markets worsen .
Tariff scenario planning: Multiple supply-chain scenarios prepared; expect minor direct effect from announced tariffs, with risk if retaliatory measures emerge .

Estimates Context

We attempted to pull Wall Street consensus (S&P Global) for Q4 2024 revenue and EPS but the request limit was exceeded, so consensus data was unavailable at this time. As a result, we cannot quantify beat/miss versus S&P Global consensus for Q4 2024 and will update when the data is accessible.*

*Values retrieved from S&P Global could not be fetched due to a temporary limit; we will refresh upon availability.

Key Takeaways for Investors

Margin quality held up: Adjusted OM of 9.9% in Q4 despite volume pressure underscores structural improvements and mix/aftermarket strengths .
FY25 guide intact but conservative: ~$9.6B revenue, 7.0–7.5% adjusted OM and $4.00–$4.50 EPS maintained; Q1 trough signaled with breakeven EPS as production cuts are front-loaded .
Inventory reset is the near-term swing factor: NA (~9 months) and SA (~5 months) dealer inventory need normalization; destocking trajectory will influence 2H25 recovery cadence and discounting .
Precision strategy remains a long-term engine: Despite PTx goodwill impairment, channel breadth (>1,000 dealers) and retrofit-first offering position AGCO for growth as demand recovers .
Watch Europe: EME margins are healthy with near-target dealer inventories; a stabilizing region could buffer volatility elsewhere .
Capital discipline: Capex trimmed to ~$375M for 2025; free cash flow conversion target of 75%–100% reiterated as working capital normalizes with inventory sell-down .
Policy risk monitoring: Potential tariff developments and retaliations remain a variable; management has contingency plans but will update the outlook as clarity improves .

Notes and Cross-References

Q4 2024 press release and 8-K provide headline results, regional sales/margins, GAAP-to-non-GAAP reconciliations, and 2025 outlook .
Q4 2024 earnings call transcript provides color on production cuts, dealer inventory, segment margin cadence, parts performance, pricing, tariffs and PTx Trimble commentary .
Prior quarters for trend: Q3 2024 press release (sales $2.60B; adjusted EPS $0.68; adjusted OM 5.5%) ; Q2 2024 press release (sales $3.25B; adjusted EPS $2.53; adjusted OM 10.3%) .
Strategic actions: Completion of Grain & Protein divestiture on Nov 1, 2024; proceeds applied to debt reduction .
Long-term targets and initial 2025 outlook introduced at Dec 19, 2024 Analyst Meeting (maintained on Q4 release) .

AGCO CORP /DE (AGCO)·Q4 2024 Earnings Summary