Deere Profit Beat Sends Shares Higher

Deere & Co reported on Friday a bigger-than-expected quarterly profit, as sales rose for the first time in 13 quarters on improving demand for its farm and construction equipment.

Shares of Deere, which has cut jobs and lowered production due to declining demand for its trademark green tractors and harvesting combines, were up 7.3 percent at $120.30 in premarket trading.

The U.S. farm equipment maker also raised it fiscal 2017 equipment sales growth forecast to 9 percent, from the previous 4 percent forecast in February.

Deere now expects fiscal 2017 net income attributable to the company to be about $2 billion, up from $1.5 billion previously.

"We are seeing modestly higher overall demand for our products, with farm machinery sales in South America experiencing a strong recovery," Chief executive Samuel Allen said in a statement.

The company's sales have been hit in the past as bumper corn and soybeans harvests drove down prices, leaving farmers with less cash to spend on equipment.

Net income attributable to Deere rose to $802.4 million, or $2.49 cents per share, in the second quarter ended April 30 from $495.4 million, or $1.56 cents per share, a year earlier.

Excluding the gain of 55 cents on sale of partial interest in affiliate SiteOne Landscape Supply Inc, which provides irrigation supplies, Deere earned $1.94 per share.

Total sales and revenue rose 5.2 percent to $8.29 billion.

Analysts on average were expecting earnings of $1.68 cents per share on revenue $7.32 billion, according to Thomson Reuters I/B/E/S.

(Reporting by Ankit Ajmera in Bengaluru; Ediitng by Arun koyyur)