By Austen Hufford
Deere & Co. sharply raised its sales growth and profit forecasts for this year as the world's largest farm-equipment manufacturer said it saw modestly higher demand.
Shares rose 7% in premarket trading as the company topped profit expectations in its second quarter.
For the year, the company now expects revenue to grow about 9%, up from 4% expected previously, and net income of about $2 billion, up from the $1.5 billion expected before. The spring quarter is typically Deere's best of the year as farmers purchase equipment or replacement parts in advance of the spring planting season.
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.
Still, equipment net sales in the U.S. and Canada fell 5% for the quarter as international sales increased 14%.
For the quarter ended April 30, sales of Deere's farm machinery rose 2.2% from a year earlier to $7.26 billion, as sales of construction and forestry equipment grew 0.9% during the quarter to $1.47 billion.
In all for the second quarter, Deere reported a profit of $802.4 million, or $2.49 a share, up from $495.4 million, or $1.56 a share, a year earlier.
Total revenue rose 2.8% to $8 billion. Total equipment sales for the quarter rose 2.2% to $7.26 billion. Analysts had forecast earnings of $1.68 with $7.32 billion of equipment sales.
Write to Austen Hufford at [email protected]