Agricultural equipment maker AGCO (AGCO) reported first-quarter results that topped expectations, but the market wasn't impressed—shares fell 5.6% on Tuesday as investors weighed tariff headwinds in North America against strong performance elsewhere.

Net sales hit $2.3 billion, up 14.3% from a year ago and slightly above the $2.259 billion consensus. Adjusted earnings per share came in at $0.94, more than double the $0.44 analysts were looking for. Reported EPS was $0.76, up from $0.14 a year earlier.

Net income attributable to AGCO rose to $55 million from $10.5 million, and adjusted operating income climbed to $107.4 million. The adjusted operating margin improved to 4.6% from 4.1%.

"AGCO delivered healthy first-quarter sales and margin results, reflecting disciplined execution in a demanding agricultural market and dynamic global environment," said CEO Eric Hansotia.

The regional picture was a tale of two worlds. Europe and the Middle East were the stars, with net sales jumping 20.3% to $1.60 billion (up 9% excluding currency) and operating income hitting $259 million. Asia/Pacific/Africa also shone, with sales up 31.2% to $124 million.

North America, however, was the problem child. Sales there rose 10% to $406.4 million, but the operating loss widened to $51 million, driven by costs related to tariffs. Latin America sales fell 17.3% to $211.7 million on weaker demand.

Industry conditions remain mixed. In North America, tractor sales dropped 8% and combine sales fell 7%. Western Europe saw tractor sales rise 7%, while Brazil tractor demand declined 10% amid high input costs.

Cash flow was a bit of a sore spot: operating activities used $410.4 million in cash. The company ended the quarter with $514.9 million in cash and equivalents, $555.5 million in short-term borrowings, and $2.02 billion in long-term debt.

To shore up its balance sheet and return capital to shareholders, AGCO agreed to sell its 49% stakes in its U.S. and Canada finance joint ventures to Rabobank subsidiaries for about $190 million. Proceeds will go toward share repurchases, and the company will also raise its quarterly dividend to $0.30. AGCO plans to start $350 million in buybacks in the second quarter.

Looking ahead, AGCO raised its full-year adjusted EPS guidance to about $6.00, above the $5.75 consensus estimate. It also increased its sales forecast to a range of $10.5 billion to $10.7 billion, compared with the $10.533 billion estimate. The outlook incorporates pricing actions, current tariff policies, and an expectation that production volumes will remain flat to slightly lower.

"As we progress through 2026, we remain firmly focused on executing our Farmer‑First strategy with a strong innovation pipeline and continued cost discipline to support healthy cash generation, positioning AGCO to navigate ongoing subdued demand and deliver improved performance as market fundamentals recover while keeping farmers at the center of everything we do," Hansotia added.

At the time of publication Tuesday, AGCO shares were down 5.63% at $114.45.