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What:Shares of farming equipment makerAGCO Corporation surged almost 10% on Feb. 3, after the company reported better-than-expected earnings in the fourth quarter.
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So what:The company's adjusted earnings came in at $1.18 per share, better than twice the $0.65 analysts were expecting. The company said the improved results were the product of an 8% reduction in operating expenses and a drop in inventory levels of about $80 million from last year.
Now what:AGCO continues to reorganize its business and reduce costs as a challenging global economy remains a concern. Sales in North America were down 15% in the quarter, while Europe/Africa/Middle East was down 6%.
The company's efforts look to be having a positive impact, but it's unclear how long the greater economic challenges will weigh on the business. For the interim, it looks as if investors will have to be happy with the dividend -- just increased by 9% -- and the $500 million the company has set aside for share repurchases to increase per-share returns.
The article Why AGCO Corporation (AGCO) Stock Surged Almost 10% originally appeared on Fool.com.
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