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Shares of specialty chemicals maker American Vanguard Corp. (AVD - Snapshot Report) shot up as much as 13% after it saw its third-quarter 2013 profit rise on strong performance of its soil insecticides. The stock eventually closed at $28.31 in the trading session following the earnings announcement, gaining roughly 8.5%.

The Newport Beach, Calif.-based company registered a profit of $8.9 million in the reported quarter, up around 10% from $8.1 million recorded a year ago. Earnings per share rose 11% to 31 cents a share from 28 cents a year ago. That, however, fell shy of the Zacks Consensus Estimate by a penny.  

Revenues went up 8% year over year to $97.2 million in the reported quarter on solid demand for American Vanguard’s granular soil insecticides as growers increasingly used them in combination with genetically modified trait seed driven by expanding insect resistance. It beat the Zacks Consensus Estimate of $96 million.

Sales also benefited from the company’s expanded agreement with Monsanto (MON - Analyst Report) to co-market its Impact herbicide with the latter’s market leading Roundup brands.

Gross margin was roughly 44% in the reported quarter, essentially flat year over year. Operating expenses rose 6% year over year to $28 million, partly due to higher selling and administrative expenses resulting from the expansion of field sales, marketing and product management teams globally and higher promotional expenses. Operating margin rose to 15.6% in the reported quarter from 14.7% in a year ago as higher revenues more than offset an increase in operating costs.

American Vanguard ended the quarter with cash of around $12.3 million, down roughly 48% year over year. Total long-term debt decreased 28% year over year to roughly $39 million.

Moving ahead, American Vanguard is well placed to offer its premium crop protection products as growers gear up for the 2014 planting season and prepare to deal with intensifying weed and insect pressure. The company sees strong demand for its diversified product lines across several crops and geographies. American Vanguard is planning to roll out a liquid, fertilizer-ready corn soil insecticide, which will complement its industry-leading granular SmartBox products.

American Vanguard makes specialty chemical products for agricultural and commercial applications. The company develops and markets an array of chemicals, including insecticides, fungicides and herbicides, for crops, human and animal health protection. American Vanguard has the largest assortment of corn soil insecticides coupled with the most advanced dispensing equipment.

American Vanguard currently retains a Zacks Rank #3 (Hold).

Other companies in the specialty chemical space with favorabe Zacks Rank are Ferro Corp. (FOE - Snapshot Report) and HB Fuller Co. (FUL - Snapshot Report). Both hold a Zacks Rank #2 (Buy).

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