Deere & Co. (DE) - Get Free Report posted stronger-than-expected third quarter earnings Friday, and lifted its full-year profit forecasts, as strong crop prices and renewed farming equipment demand boosted the group's top and bottom lines.
Deere said earnings for the three months ending on August 1, the group's fiscal third quarter, came in at $5.32 per share, up 107% from the same period last year and well ahead of the Street consensus forecast of $4.58 per share. Group worldwide sales, Deere said, rose 29% from last year to $11.527 billion, again topping analysts' forecasts of a $10.305 billion tally.
Looking into the end of the 2021 fiscal year, which ends in October, Deer said it sees worldwide agriculture and turf equipment sales rising 25% from 2020 levels, with construction and forestry equipment sales rising 30%. Net income fiscal 2021 was pegged between $5.7 billion and $5.9 billion, up from its prior forecast of $5.3 billion to $5.7 billion.
“Our strong results, driven by essentially all product categories, are a testament to the exceptional efforts of our employees and dealers to keep our factories running and customers served while enduring significant supply-chain pressures,” said CEO John May. “We also made strategic investments in the quarter aligned with our smart industrial strategy. They will further our efforts to help our customers achieve improved profitability, productivity, and sustainability through the effective use of technology."
“Looking ahead, we expect demand for farm and construction equipment to continue benefiting from favorable fundamentals,” May added. “We are, at the same time, excited by the growing engagement with our digital platform, the John Deere Operations Center, as well as continued adoption of precision technologies, which unlock greater value for our customers."
Deere shares were marked 1.8% higher in early trading Friday to change hands at $365.60 each.
Last month, Deere's larger rival, Caterpillar Inc., (CAT) - Get Free Report cautioned that operating profit margins would narrow over the coming months even as it posted better-than-expected second-quarter earnings amid a surge in construction sales.
Operating profit margin was 13.9% for the quarter, down from rising from 15.3% in the previous three month period, Caterpillar said. Third quarter margins, Caterpillar said, should be higher than last year as volumes improve, but will likely moderate from current levels.