Agricultural equipment maker
) has announced the expiration of the tender offer for its
outstanding 1 1/4% Convertible Senior Subordinated Notes due
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According to the terms of the notes, each holder had the right to
make AGCO purchase on Jan 2, 2014, all or part of such holder's
notes at a price equal to 100% of the principal amount of the
notes, plus accrued and unpaid interest.
Recently, AGCO's Board sanctioned the repurchase of shares worth
up to $500 million. This is consistent with AGCO's commitment to
increase shareholder value through continuous investments in the
AGCO's earnings in third-quarter 2013 improved 32% year over year
to $1.27 per share. Revenues also increased 7.9% year over year
to $2.5 billion, mainly driven by strong market demand in South
America and the Asia Pacific region.
Despite improved results, AGCO reiterated its full-year 2013
earnings per share guidance of $6.00. The company also maintained
its full-year revenue outlook at $10.8-$11 billion. Strong growth
in South America and modest performance in North America is
expected to be offset by moderate declines in Western Europe.
AGCO is expected to benefit from strong free cash flow and its
focus on earnings growth. The company should also gain from
regular upgrading of high-tech solutions for farmers, which will
provide a competitive edge, international expansion plans,
healthy farm income and increased demand for grain storage.
However, robust demand, which had been benefiting North America
results, may be unsustainable going forward. Furthermore, margin
headwinds remain in the form of increased engineering
expenditures to meet Tier 4 emission requirements.
Duluth, Ga.-based AGCO is a global leader involved in the design,
manufacture and distribution of agricultural machinery. AGCO
supports productive farming through a wide range of tractors,
combines, hay tools, sprayers, forage equipment, tillage
implements, grain storage and protein production systems, and
other related replacement parts.
AGCO currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the machinery-farming sector include
) with a Zacks Rank #1 (Strong Buy), and
Alamo Group, Inc.
) with a Zacks Rank #2 (Buy).