Agricultural and farm machinery company AGCO (NYSE: AGCO) missed Wall Street’s revenue expectations in Q2 CY2026, with sales flat year on year at $2.61 billion. The company’s full-year revenue guidance of $10.15 billion at the midpoint came in 4.1% below analysts’ estimates. Its GAAP profit of $1.08 per share was 25.1% below analysts’ consensus estimates.

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"AGCO's second-quarter results reflect our ongoing emphasis on delivering productivity for farmers while driving greater efficiency throughout the company to further strengthen profitability through the economic cycle. Farmers responded to rising uncertainty around input costs and demand by taking a more cautious approach to equipment purchases," said Eric Hansotia, AGCO's Chairman, President and CEO.

Company Overview

With a history that features both organic growth and acquisitions, AGCO (NYSE: AGCO) designs, manufactures, and sells agricultural machinery and related technology.

Revenue Growth

A company’s long-term sales performance is one signal of its overall quality. Any business can put up a good quarter or two, but the best consistently grow over the long haul. Unfortunately, AGCO struggled to consistently increase demand as its $10.35 billion of sales for the trailing 12 months was close to its revenue five years ago. This wasn’t a great result and suggests it’s a low quality business.

We at StockStory place the most emphasis on long-term growth, but within industrials, a half-decade historical view may miss cycles, industry trends, or a company capitalizing on catalysts such as a new contract win or a successful product line. AGCO’s recent performance shows its demand remained suppressed as its revenue has declined by 12.2% annually over the last two years.

This quarter, AGCO missed Wall Street’s estimates and reported a rather uninspiring 1% year-on-year revenue decline, generating $2.61 billion of revenue.

Looking ahead, sell-side analysts expect revenue to grow 4.5% over the next 12 months. Although this projection implies its newer products and services will catalyze better top-line performance, it is still below the sector average.

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Operating Margin

AGCO was profitable over the last five years but held back by its large cost base. Its average operating margin of 7% was weak for an industrials business. This result isn’t too surprising given its low gross margin as a starting point.

Looking at the trend in its profitability, AGCO’s operating margin decreased by 2.7 percentage points over the last five years. AGCO’s performance was poor no matter how you look at it - it shows that costs were rising and it couldn’t pass them onto its customers.

In Q2, AGCO generated an operating margin profit margin of 5.4%, in line with the same quarter last year. This indicates the company’s cost structure has recently been stable.

Earnings Per Share

We track the long-term change in earnings per share (EPS) for the same reason as long-term revenue growth. Compared to revenue, however, EPS highlights whether a company’s growth is profitable.

Sadly for AGCO, its EPS declined by 5.5% annually over the last five years while its revenue was flat. This tells us the company struggled because its fixed cost base made it difficult to adjust to choppy demand.

We can take a deeper look into AGCO’s earnings to better understand the drivers of its performance. As we mentioned earlier, AGCO’s operating margin was flat this quarter but declined by 2.7 percentage points over the last five years. This was the most relevant factor (aside from the revenue impact) behind its lower earnings; interest expenses and taxes can also affect EPS but don’t tell us as much about a company’s fundamentals.

Like with revenue, we analyze EPS over a more recent period because it can provide insight into an emerging theme or development for the business.

For AGCO, its two-year annual EPS growth of 13.5% was higher than its five-year trend. This acceleration made it one of the faster-growing industrials companies in recent history.

In Q2, AGCO reported EPS of $1.08, down from $4.22 in the same quarter last year. This print missed analysts’ estimates. Over the next 12 months, Wall Street expects AGCO’s full-year EPS to shrink by 7.8% from $7.22 to $6.66.

Key Takeaways from AGCO’s Q2 Results

We struggled to find many positives in these results. Its full-year revenue guidance missed and its revenue fell short of Wall Street’s estimates. Overall, this quarter could have been better. The stock traded down 3.1% to $112.58 immediately after reporting.

AGCO’s earnings report left more to be desired. Let’s look forward to see if this quarter has created an opportunity to buy the stock. If you’re making that decision, you should consider the bigger picture of valuation, business qualities, as well as the latest earnings. We cover that in our actionable full research report which you can read here (it’s free).