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Deere & Co. (DE-N72.85-1.33-1.79%) posted higher quarterly earnings and sales that topped estimates and raised its full-year profit outlook on Wednesday on rising global demand for farm equipment.
The U.S. farm sector is booming on higher worldwide food demand and as biofuels help drive up crop production. Companies like Deere are benefiting from record-high farm income that is spurring farmers to update their equipment.
?Deere is hitting on all cylinders,? said Gary Bradshaw, portfolio manager at Hodges Capital in Dallas.
Sales increased by double digits in the agriculture, and construction and forestry equipment divisions during the quarter.
?Trying to feed everyone, and with more folks going into the middle class that want to eat more meat and protein, you need to feed more cattle and hogs and plant more corn, milo and wheat,? Mr. Bradshaw said. With commodities prices up, farmers? ?pockets are full and they tend to run and buy more equipment.?
The world?s largest farm equipment maker said fiscal second-quarter net income rose to $1.056-billion, or $2.61 per share, from $904.3-million, or $2.12 a share, a year ago. The results topped the average estimate of $2.53, according to Thomson Reuters I/B/E/S.
Net sales of equipment operations rose to $9.4-billion from $8.33-billion a year earlier. Worldwide net sales and revenues increased 12 per cent to $10.01-billion in the quarter, above the average estimate of $9.7-billion.
The company also raised its forecast for 2012 net income to about $3.35-billion from $3.275-billion.
Deere?s shares erased premarket gains to trade 0.7 per cent lower at $76.04 early on the New York Stock Exchange.
Read more at http://www.theglobeandmail.com/glob...source=Report On Business&utm_content=2434671
The U.S. farm sector is booming on higher worldwide food demand and as biofuels help drive up crop production. Companies like Deere are benefiting from record-high farm income that is spurring farmers to update their equipment.
?Deere is hitting on all cylinders,? said Gary Bradshaw, portfolio manager at Hodges Capital in Dallas.
Sales increased by double digits in the agriculture, and construction and forestry equipment divisions during the quarter.
?Trying to feed everyone, and with more folks going into the middle class that want to eat more meat and protein, you need to feed more cattle and hogs and plant more corn, milo and wheat,? Mr. Bradshaw said. With commodities prices up, farmers? ?pockets are full and they tend to run and buy more equipment.?
The world?s largest farm equipment maker said fiscal second-quarter net income rose to $1.056-billion, or $2.61 per share, from $904.3-million, or $2.12 a share, a year ago. The results topped the average estimate of $2.53, according to Thomson Reuters I/B/E/S.
Net sales of equipment operations rose to $9.4-billion from $8.33-billion a year earlier. Worldwide net sales and revenues increased 12 per cent to $10.01-billion in the quarter, above the average estimate of $9.7-billion.
The company also raised its forecast for 2012 net income to about $3.35-billion from $3.275-billion.
Deere?s shares erased premarket gains to trade 0.7 per cent lower at $76.04 early on the New York Stock Exchange.
Read more at http://www.theglobeandmail.com/glob...source=Report On Business&utm_content=2434671