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Deere Leaps Over Estimates

Strong overseas sales overcome a soft U.S. performance.
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Deere (DE) - Get Free Report bounded over third-quarter targets, as solid overseas sales and a weak dollar helped overcome soft U.S. results.

The Moline, Ill., tractor company made $537 million, or $2.37 a share, for the quarter ended July 31, up from the year-ago $436 million, or $1.85 a share. Revenue rose 6% from a year ago to $6.63 billion.

Analysts surveyed by Thomson Financial were looking for a $1.99-a-share profit on sales of $6.65 billion.

"Deere's efforts to grow a great business, particularly with the support of improving conditions across the global farm sector, are gaining strong momentum and producing powerful results," said CEO Robert W. Lane. "Advanced new products and services are helping expand the company's market presence throughout the world. At the same time, our focus on rigorous asset management allows us to serve this growing customer base at the highest level while maintaining lean, efficient inventory levels."

The news comes as makers of heavy equipment such as Deere and


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have enjoyed strong gains overseas, offset by a weakening performance at home.

Net sales of the worldwide equipment operations rose 5% from a year ago, reflecting positive effects for currency translation and price changes of 5%. Equipment sales in the U.S. and Canada were down 5%, while net sales outside the U.S. and Canada increased by 30%. Currency translation added 6 percentage points to sales outside the U.S. and Canada for the quarter.

Deere said it expects equipment sales to rise 16% in the fourth quarter and 7% for the full year, including gains of about 5 percentage points due to sales made by recently acquired Lesco and 3 points of positive currency translation. The company projected full-year earnings of $1.7 billion.