Deere & Company (NYSE: DE) reported its second quarter financial results, despite missing estimates in both revenue and earnings, shares rose by 6.1 percent late Friday on the company’s strong fiscal outlook.
For the first quarter, Deere reported net sales of $9.75 billion, increasing 34 percent year over year and topping analysts’ estimates by $80.0 million. The company reported net income of $1.21 billion or $3.67 per share, compared to $808.5 million or $2.50 per share last year. Adjusted EPS was $3.14, below analysts’ estimates of $3.30.
Deere’s acquisition of Wirtgen Group last year in December added 12 percent to the company’s net sales this quarter.
U.S. and Canada equipment sales rose by 27 percent for the quarter. Outside of the two, net sales rose by 45 percent, driven by Wirtgen 23 percent growth.
Construction and Forestry sales increased by 84 percent for the quarter, and expected to grow by 14 percent for the year. Deere’s Agriculture and Turf sales rose by 22 percent, and is expected to grow by 83 percent for the year.
“John Deere reported another quarter of strong performance helped by a broad-based improvement in market conditions throughout the world and a favorable customer response to our lineup of innovative products,” said Samuel Allen, chairman and chief executive officer.
“Farm machinery sales in both North and South America are making solid gains and construction equipment sales are continuing to Deere Announces Second-Quarter Earnings Page 2 move sharply higher.” added Allen.
For the fiscal year, Deere is forecasting sales of equipment to rise by 30 percent, and for the third quarter, to rise about 35 percent. Net income is expected to be about $2.3 billion, including a $803 million in provisional income tax expense due to the tax revamp. The new forecast is revised from the company’s previous outlook of $977 million.
“We are encouraged by strengthening demand for our products and believe Deere is well-positioned to capitalize on further growth in the world’s agricultural and construction equipment markets,” Allen said. “We reaffirm our confidence in the company’s present direction and our belief that Deere remains on track to deliver significant long-term value to customers and investors.”