Led by efforts to expand globally that helped boost equipment sales, Deere (DE) reported sharply stronger fourth-quarter sales on Wednesday but disappointed Wall Street expectations as growing costs outpaced higher revenue.
The Moline, Ill.-based tractor maker posted net income of $687.6 million, or $1.75 a share, compared with a year-earlier profit of $669.6 million, or $1.62, below average analyst estimates of $1.88 a share in a Thomson Reuters poll.
Revenue for the three months ended Oct. 31 rose 14% to $9.79 billion from a year-earlier $9.05 billion, led by stronger equipment sales. The results missed the Street’s view of $8.85 billion.
"In the face of continuing global economic pressure, John Deere has completed another record year," the company’s chief executive, Samuel Allen, said in a statement.
Deere, which opened new factories in China, India and Brazil last quarter, attributed last period’s improvement in sales to new innovative equipment and efforts to expand its global footprint. North American equipment sales jumped 26%, led by stronger prices and volumes.
The gains, however, fell short of Wall Street’s expectations due to higher production, SG&A and R&D costs. Shares of Deere fell 3% premarket Wednesday to $83.45.
Deere projects equipment sales to grow by 5% in fiscal 2013, which includes an estimated 10% year-over-year increase in the first quarter.
It forecasts full-year net income of $3.2 billion, up from $3.06 billion in the same 2012 period. The consensus is calling for net income of $3.23 billion.
Allen said Deere remains well-positioned to carry out its growth plans and capitalize on long-term trends, though it warned that the current economic environment and ongoing fiscal concerns “warrant continued caution.”
The maker of loaders and dozers said high commodity prices and strong farm incomes are expected to continue supporting demand for farm machinery, while broader sales benefit from global expansion and new lines of equipment.