DULUTH, Ga. -- AGCO Corp. has reduced its outlook for 2006 net sales and adjusted earnings per share. The company now expects sales to decline by 2 percent to 3 percent vs. 2005 and for 2006 adjusted earnings per share to be approximately $1.

Sales and operating income in AGCO's North American operations are now expected to be lower than previously forecasted due to continued efforts to reduce dealer inventories, softening market conditions, and lower than anticipated margins. Weaker than expected market conditions in the East Asia Pacific region also contributed to the reduced sales and earnings outlook.

Third quarter 2006 sales are now expected to be approximately 6 percent below third quarter 2005 levels, and third quarter 2006 net income is now expected to be break-even to a slight loss.

Benefiting from the company's focus on reducing seasonal working capital requirements, 2006 free cash flow is now expected to be approximately $120 million.

A replay of this morning's conference call for investors and analysts will be available at www.agcocorp.com under the "Investors & Media/Calendar of Events" Section.
AGCO expects to announce financial results for the third quarter of 2006 on Nov. 1.

The references above to adjusted earnings per share and free cash flow are non-GAAP measures. Adjusted earnings per share is calculated by excluding restructuring expense, which is expected to be approximately $0.01 in 2006, from earnings per share. Free cash flow is calculated by subtracting capital expenditures, which are expected to be approximately $120 million in 2006, from cash flow from operations.

Founded in 1990, AGCO Corporation is a global manufacturer of agricultural equipment and related replacement parts. AGCO offers a full product line including tractors, combines, hay tools, sprayers, forage, tillage equipment and implements, which are distributed through more than 3,600 independent dealers and distributors in more than 140 countries worldwide. The company is headquartered in Duluth, Ga., and in 2005 had net sales of $5.4 billion.

SOURCE: AGCO Corporation via Business Wire.