Shares of Deere & Co. surged 6.5% in premarket trade Friday after the agriculture and construction machinery company reported fiscal second-quarter results that were well above expectations and provided an upbeat outlook.
Sales worldwide increased 2 percent in the quarter despite a drag in the US and Canada, where sales fell 5 percent. In addition, net equipment operations sales hit $7.260 billion for the present quarter, reaching $11.958 billion over the first six months; compared against $7.107 billion and $11.876 billion for the same periods from the year prior.
But the firm forecast an 9% rise in sales for the financial year, powered in part by a 20% rise in sales of farm machinery in South America. Net income rose from $393 million a year ago to $694 million.
Net sales in equipment operations reached $7.25 billion during the quarter and $11.96 billion for the six months, in comparison to $7.01 billion and $11.9 billion for the same time frames respectively previous year.
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"Deere is demonstrating a continuing ability to produce impressive results through all phases of the business cycle", Allen said.
Operating profit was $1.003 billion for the quarter and $1.215 billion year to date, compared with respective totals of $614 million and $759 million last year.
The company has, admittedly, taken a bit of a blow over the past few years, as bumper corn and soybean crop harvests drove prices down, leaving farmers with far less expendable cash to spend on new equipment.
Net receivables and leases financed by JDCC were $32.015 billion at April 30, 2017, compared with $33.208 billion at May 1, 2016.