Deere & Co. reported rising sales in its fiscal third quarter, but the metric fell short of analysts' expectations as the company works past the challenges facing U.S. farmers by extending its reach in higher-growth markets overseas.
The company said Friday that the farm and construction equipment market grew stronger during the quarter on increased demand in South America, helping boost farm machinery and construction equipment sales. Sales of Deere's green-and-yellow tractors and combines are projected to grow 10% in the current fiscal year.
The company also raised its full-year earnings guidance to $2.08 billion from $2 billion.
Elsewhere internationally, the Moline, Ill., company agreed to acquire Germany's Wirtgen Group for about 4.36 billion euros ($5.12 billion) in June. Wirtgen, with strong operations in China and Brazil, could be an opportunity for Deere to increase its volume those regions.
In its third quarter ended July 31, Deere reported a profit of $641.8 million, or $1.97 per share, compared with $488.8 million, or $1.55 a share, a year earlier.
Total revenue, including Deere's financial-services business, rose 16% to $7.81 billion. Net equipment sales reached $6.83 billion, up 17% from last year.
Analysts had expected Deere to earn $1.95 a share on net equipment sales of $6.92 billion.
Deere said sales of farm and construction equipment in the U.S. and Canada grew 11% in its third quarter, while sales elsewhere in the world increased 25%. Equipment sales are expected to climb 24% in the fourth quarter and rise 10% for the fiscal year.
Deere shares, which are up 60% in the last 12 months, fell 4.6% to $118.25 in premarket trading.
(END) Dow Jones Newswires
August 18, 2017 08:43 ET (12:43 GMT)