UPDATE 1-AG Growth Q1 lags market as interest expense rises

Thu May 13, 2010 9:08am EDT

* Q1 EPS C$0.49 vs est. C$0.58

* Q1 revenue falls 7 pct, lags est.

May 13 (Reuters) - Grain handling equipment maker Ag Growth International Inc's (AFN.TO) quarterly profit dropped 37 percent, below market estimates, primarily hurt by interest expense and income taxes.

For the first quarter, the company reported a net income of C$6.4 million, or 49 Canadian cents a share, compared with C$10.1 million, or 79 Canadian cents a share, a year earlier.

Revenue fell 7 percent to C$51.6 million.

Analysts on average were expecting earnings of 58 Canadian cents a share, before special items, on revenue of C$54.3 million, according to Thomson Reuters I/B/E/S.

The company said its interest expense and income taxes in total increased by C$5.3 million from the prior year.

Ag Growth's interest expense rose as it raised C$115 million through a debenture offering in October 2009 to fund growth and acquisition opportunities

Shares of the company closed at C$35.70 Wednesday on the Toronto Stock Exchange. (Reporting by Koustav Samanta in Bangalore; Editing by Unnikrishnan Nair)

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