The world's largest farm equipment manufacturer, however, expects supply-chain pressures to intensify in the remainder of the year.
The Illinois-based company is not alone. Rising demand coupled with COVID-19 disruptions has caused capacity constraints all along the supply chain, leaving manufacturers short of the steel, plastics, microchips and tires they need for their products.
|DE||DEERE & CO.||300.70||+1.17||+0.39%|
Chief Executive Officer John May said Deere is working closely with key suppliers to secure the parts and components.
The company said net income for 2021 would be between $5.3 billion and $5.7 billion, up from a previous forecast of $4.6 billion to $5.0 billion.
Deere's shares, which have outperformed the S&P 500 with a gain of about 32% this year, were up $1.9% at $362 in pre-market trade.
Farm machinery companies are benefiting from a turnaround in the U.S. farm economy following a run-up in grain prices. A record surge in U.S. corn and soybean prices has boosted farmers' incomes, lifting demand for tractors and combines.
That is a sharp contrast from previous years when American farmers were grappling with a series of challenges: an oversupply of grain, former President Donald Trump's trade war with China and then the pandemic.
Deere expects industry sales of large agricultural equipment in the United States and Canada - the company's biggest combined market - to grow by 25% this year compared with growth of 15% to 20% estimated in February.
Earnings for the second quarter came in at $5.68 per share, higher than $2.11 per share a year ago. Equipment sales rose 34% year-on-year to about $11 billion.
(Reporting by Rajesh Kumar Singh in Chicago and Shreyasee Raj in Bengaluru;Editing by Vinay Dwivedi and Chizu Nomiyama)