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CEO: Chances of diplomatic solution to Ukraine relatively good

As a supplier of agricultural equipment to places all around the world, including hotspots such as Russia and Ukraine, few people may have better insights into the state of global affairs than AGCO CEO Martin H. Richenhagen.

And during an interview on CNBC's "Mad Money" he told Jim Cramer, "I think if you read the signs properly we might get into a solution and avoid any kind of physical confrontation (in Ukraine)."

"That made my day," Cramer replied. "You've got boots on the ground and I think you know more than many reporters."

Richenhagen had been speaking with Cramer about his company's joint venture with a Russia-based distributor of agricultural equipment and Russian President Vladimir Putin's keen interest in obtaining better machinery.

Largely Richenhagen suggested there's too much at stake for Putin to ultimately engage in a military confrontation.

"They don't have many domestic manufacturers (of farm equipment in Russia). They need the foreign technology."

Russia's President Vladimir Putin smiles in the Novo-Ogaryovo residence outside Moscow, on April 18, 2014.
Alexey Druzhinin | AFP | Getty Images
Russia's President Vladimir Putin smiles in the Novo-Ogaryovo residence outside Moscow, on April 18, 2014.

Looking at AGCO broadly, Cramer said he admires the many business strategies initiated under the leadership of Richenhagen.

"Right now the ag environment is tough, no question. Crop prices are down versus last year, which means farmers are spending less on new equipment."

However, Cramer said AGCO is looking to boost the bottom line in other ways.

"The company's gotten aggressive about cutting costs; they think they can save 15 to 20 percent on parts by sourcing them to the cheapest countries. Meanwhile, in North America AGCO has been optimizing their dealer network, shutting down weaker locations while also using Caterpillar's dealers to sell their high-quality Challenger brand tractors."

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Cramer likes the story and believes recent earnings confirm his outlook.

"When AGCO reported last week the company blew away the estimates, earning $1.03 per share, a massive 27-cent beat, on higher than expected revenues." Cramer said

Also AGCO maintained upside sales and earnings guidance for the full-year.

"You have to admire a company that's doing everything it can to take control of its own destiny and thrive in an industry that's currently struggling. In a word, that's AGCO.




Call Cramer: 1-800-743-CNBC

Questions for Cramer? madmoney@cnbc.com

Questions, comments, suggestions for the "Mad Money" website? madcap@cnbc.com

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