John Deere (NYSE: DE), an American farm and construction equipment maker, disclosed record annual income Wednesday, in spite of its recent five-week worker strike. Shares were up 2% during pre-market trading upon the positive news.
The company announced Wednesday that it had earned USD1.28 Billion from August through October. The positive results pushed Deere’s profit for the fiscal year to USD5.96 Billion, more than double last year’s annual net income of USD2.8 Billion. Furthermore, it reported earnings of USD4.12 per share, compared to analysts’ anticipated USD3.87 a share.
“Our results reflect strong end-market demand and our ability to continue serving customers while managing supply-chain issues and conducting contract negotiations with our largest union,” said CEO John May. “Last week’s ratification of a six-year agreement with the UAW brings our highly skilled employees back to work building the finest products in our industries. The agreement shows our ongoing commitment to delivering best-in-class wages and benefits.”
The report follows the five-week-long United Auto Workers strike, which was ultimately resolved on November 17. However, the report only bore about half of the strike’s impact, as it commenced with only two weeks left in the quarter.
Similar to other manufacturers, the company has faced continuous supply chain disruptions amid the coronavirus pandemic. Additionally, Mills have not been able to produce a sufficient amount of steel, while logistics companies have failed to provide enough truck drivers that will haul the products. Executives have cautioned investors that they anticipate these issues to continue through next year, increasing its expenses by USD2 billion.
Nevertheless, the company predicts that demand for its production and precision agricultural equipment will rise by 25% next year.
“We expect demand for farm and construction equipment to continue benefiting from positive fundamentals, including favorable crop prices, economic growth, and increased investment in infrastructure,” May said in a statement.