It’s harvest time for Deere investors.
The company, best known for its green and yellow tractors, saw its shares surged surged nearly 9 per cent in pre-market trading to hit a fresh record high of $122.55 after it significantly lifted its full year sales and profits guidance.
The world’s largest farm equipment maker said on Friday that net sales and revenues are expected to increase by 9 per cent for the fiscal 2017 year ending October, a sharp jump up from the 4 per cent increase it was forecasting just 3 months ago and a decline of 1 per cent it had originally predicted back in November.
Net income is now seen at about $2bn for the fiscal year, up from the $1.5bn it was previously expecting.
“John Deere reported strong results in the second quarter as market conditions
showed signs of further stabilization,” said Samuel R. Allen, chairman and
chief executive officer. “We are seeing modestly higher overall demand for our
products, with farm machinery sales in South America experiencing a strong
The improved outlook comes following a disappointing 2016 for Deere, which was forced to repeatedly cut its sales and profit forecasts last year as bumper crops, weak grain prices and slowing global demand put pressure on farm incomes and prompted farmers to put off purchasing new equipment or buy used machines instead.
Deere’s newfound optimism was underscored by the company’s fiscal second quarter results.
Total equipment sale rose 2 per cent to $7.26bn in the three months to end of April while net income jumped 62 per cent to $802m as aggressive cost cutting and gains from an asset sale also helped padded the bottomline.