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What: Shares of farming equipment maker AGCO Corporation (NYSE:AGCO) surged almost 10% on Feb. 3, after the company reported better-than-expected earnings in the fourth quarter.
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.
Jason Hall has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.