Deere profit beats on strong farm equipment demand, shares jump

Ebony Scott
May 19, 2017

Deere & Co. reports earnings, Friday, May 19, 2017.

Net sales in equipment operations reached $7.25 billion during the quarter and $11.96 billion for the six months, in comparison to $7.01 billion and $11.9 billion for the same time frames respectively previous year.

The maker of John Deere machinery raised by $500m to $2.0bn its forecast for group earnings for the year to October - a figure well ahead of the $1.49bn expected by Wall Street, and a result which would be the best in three years. "As a result, we have raised our forecast and are now calling for significantly higher earnings for the full year". In the same period a year ago, the company reported adjusted EPS of $1.56 on revenues of $7.88 billion.

DE increased its forecast numbers, with equipment sales now projected to increase about 9% for FY17 and to rise about 18% for Q3 compared with the same periods of 2016.

Analysts had pencilled in group sales growth of 4.0%.

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The Moline, Ill. -based company also said it saw a strong recovery from farm machinery sales in South America and that overall market conditions showed further signs of stabilization.

Allen also attributes the uptick to the execution of operating plans, the strength of a broad portfolio, and their desire to develop a more agile cost structure.

Shares of Deere, which has cut jobs and lowered production due to declining demand for its trademark green tractors and harvesting combines, were up 7.3 per cent at $120.30 in premarket trading.

Deere beat last year's quarterly EPS by 60% and the consensus estimate by 48%.

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