Deere (NYSE:DE) beat the Street with a 65% leap in fiscal second-quarter profits amid higher prices and stronger volumes, prompting the world’s largest farm equipment maker to boost its outlook.
The Moline, Ill.-based company said it earned $904.3 million, or $2.12 a share, in the quarter ended April 30, compared with a profit of $547.5 million, or $1.28 a share, a year earlier.
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Analysts had been calling for profits of $2.06 a share.
Total sales jumped 25% to $8.91 billion, surpassing expectations for $8.14 billion.
“With our record second-quarter performance, John Deere is well on its way to a year of exceptional results,” CEO Samuel Allen said in a statement. “Our success reflects strong demand for our innovative lines of equipment and the continued skillful execution of our business plans.”
Shares of Deere declined 1.33% to $85.80 in Wednesday’s premarkets, putting them on track to erase some of their 2011 gain of 4.7%. Still, the stock has leaped about 50% over the past year.
Looking ahead, Deere projected equipment sales will leap 20% in the current quarter and rise 21 % to 23% for the fiscal year. Previously, Deere called for an 18% to 20% rise in full-year sales.
Agriculture and turf sales are seen increasing 20%, while construction and forestry equipment sales are expected to soar 35%.
"Markets for construction equipment in the U.S. and for farm machinery in Europe are in the early stages of recovery," Allen said. "We're optimistic about the longer-term opportunity for further improvement in these and other key areas."
Deere warned it sees its full-year sales taking a $300 million hit due to the Japanese disaster, translating to a $70 million reduction in operating profits.