Farm equipment maker Agco Corp. said Tuesday that its profit vaulted 50 percent in the first quarter, as stronger demand for tractors, combines and other machinery drove revenue higher.
The results trumped Wall Street expectations, and shares jumped 6 percent.
The company reported net income of $120.2 million, or $1.21 a share, for the three months ended March 31. That compares with a profit of $80 million, or 81 cents a share, in the 2011 first quarter.
Revenue rose about 26 percent to $2.27 billion from $1.8 billion a year ago.
Analysts had expected, on average, a profit of 86 cents a share, on revenue of $2.1 billion, according to data provider FactSet.
AGCO increased its investment in new product development, resulting in higher engineering expenses.
But it also got a boost from its acquisition last fall of GSE Holdings, which makes equipment for storing grain and for chicken and pork producers.
Agco also saw demand improve in key Western European markets. North American sales trend also remained strong, the company said.
In response to positive industry trends, Agco plans to expand its Fendt manufacturing facility in Marktoberdorf, Germany, and build a horsepower production facility in China. It also said it would keep investments in new product development and expansion at a high level in coming quarters.
The company expects global industry sales to increase modestly this year from 2011 levels, with growth coming from Europe and remaining strong in North America and South America.
Agco is aiming for 2012 adjusted earnings per share of $5.50, and sales between $10.2 billion and $10.5 billion. That's ahead of Wall Street's projections, which call for adjusted earnings of $5.08 for the full year on $9.92 billion in revenue.
Agco shares added $2.77, or 6 percent, to close trading at $49.34. Shares have traded between $30.11 and $59.22 in the past 52 weeks.