Deere shares rose 3% on back of profit growth and favorable forecasts
2023.02.17 10:00
Deere shares rose 3% on back of profit growth and favorable forecasts
By Ray Johnson
Budrigannews.com – And Deere (NYSE:) After exceeding Wall Street’s quarterly earnings estimates due to strong demand for its high-horsepower tractors and an increase in construction customer spending, Co raised its annual profit forecast on Friday.
Before the bell, shares of the largest manufacturer of farm equipment in the world were up 3%.
Despite concerns about a recession, the industrial bellwether, which serves as a gauge for the global economy, has maintained substantial profit margins. After producers were able to purchase new equipment or upgrade their fleets thanks to last year’s increased crop commodities, there has been a strong demand from farmers.
According to executives, Deere’s North American order books for large tractors were full for the year, and the company had sold out of combines before planting season.
Deere has been able to offset rising shipping costs and constrained supply chains by raising prices across its equipment divisions, maintaining its high margins.
The production and precision agriculture division of the Moline, Illinois-based company saw the most growth, with quarterly sales increasing 55% from the previous year, while the equipment division saw a 34% increase.
The construction and forestry segment of the machinery manufacturer saw a 26% increase in net sales year over year.
The financial services division of the company has performed well, but the segment’s income decreased to $185 million from $231 million in the previous quarter.
In comparison to the earlier estimate of $8 billion to $8.5 billion, the company anticipates a net income of $8.75 billion to $9.25 billion for the year.
Refintiv analysts had predicted that Deere’s equipment revenue for the quarter would be $11.28 billion. Instead, it came in at 11.4 billion.
The company’s net income increased to $1.96 billion, or $6.55 per share, exceeding analyst expectations of $5.57 per share.
For the first fiscal quarter that began in January, total net sales and revenue increased to $12.65 billion, up from $9.57 billion.
