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Tags: Financial Markets | Infrastructure | Money | Deere | farm equipment

Deere Profit Surge Powered by Farm Equipment Demand

Deere farm equipment
Strong farm and construction equipment sales drove Deere & Co.'s second-quarter profits up 27 percent from a year ago, handily beating Wall Street's expectations amid a buying rebound the implement maker says will continue through the year. (AP)

Wednesday, 24 November 2021 07:34 AM

Deere & Co surpassed market estimates for quarterly profit on Wednesday, as a surge in crop and livestock prices encouraged farmers to splurge on tractors and combines.

The results sent shares of the world's largest farm equipment maker 3% higher in premarket trading and eased some fears around the impact of a worker strike that had hit Deere's operations for about three weeks of the fourth quarter.

Higher corn and soybeans prices this year have brightened the financial outlook for farmers, with the U.S. Department of Agriculture estimating net farm income to rise 19.5% to $113 billion in 2021.

That has driven up sales of farm equipment despite price hikes by manufacturers. Deere said sales of its large and some medium equipment jumped 23% in the quarter, while sales of smaller farm and turf equipment rose 17%.

The company increased prices by 8% for its large and medium equipment orders to offset rising inflation, helping fatten its margins.

Net income rose to $1.28 billion, or $4.12 per share, in the quarter to Oct. 31, from $757 million, or $2.39 per share, a year earlier. Analysts on average had expected a profit of $3.90 per share, according to Refinitiv.

Deere's equipment sales rose 19% to $10.28 billion, below expectations of $10.44 billion.

The company earlier this month agreed to a new deal with its workers belonging to the United Auto Workers union, ending a nearly six-week-long strike.

© 2021 Thomson/Reuters. All rights reserved.


StreetTalk
Deere & Co surpassed market estimates for quarterly profit on Wednesday, as a surge in crop and livestock prices encouraged farmers to splurge on tractors and combines.
Deere, farm equipment
236
2021-34-24
Wednesday, 24 November 2021 07:34 AM
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