On Friday, John Deere said that its fiscal second quarter profit and revenue both rose as well as surpassed analyst estimates. The company also said it has raised its outlook for the fiscal year in equipment sales growth outlook from 4 percent to 9 percent. The farm and construction equipment manufacturer has cut some jobs and reduced production—a result of declining demand—which has helped to boost shares by more than 7 percent, to $120.30 in premarket trading.
Known for its trademark green tractors and harvesting combines, the company now expects fiscal 2017 net income to reach about $2 billion, approximately 35 percent higher than originally anticipated.
John Deere, Chief Executive Officer Samuel Allen comments, “We are seeing modestly higher overall demand for our products, with farm machinery sales in South America experiencing a strong recovery. Deere’s performance also reflects the sound execution of our operating plans, the strength of a broad product portfolio, and the impact of our actions to develop a more agile cost structure. As a result, we have raised our forecast and are now calling for significantly higher earnings for the full year.”
Globally, net sales and revenues were up 5 percent—to $8.287 billion—for the second quarter, and is up 4 percent—to $13.912 billion—over the past six months. 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.
In response to the report, chairman and CEO Samuel R. Allen also notes, “John Deere reported strong results in the second quarter as market conditions showed signs of further stabilization. We are seeing modestly higher overall demand for our products, with farm machinery sales in South America experiencing a strong recovery.”
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. But the company is rebounding, obviously.
Allen continues, “Deere is demonstrating a continuing ability to produce impressive results through all phases of the business cycle. This resilience illustrates our success driving improved operating efficiencies and developing a wider range of revenue sources.”