Deere & Co. (DE) - Get Deere & Company Report posted stronger-than-expected fourth quarter earnings Wednesday, but noted that supply chain pressures will continue to pose a challenge to an otherwise solid profit outlook for its coming fiscal year.
Deere said earnings for the three months ending on October 31, the group's fiscal fourth quarter, came in at $4.12 per share, up 72.4% from the same period last year and well ahead of the Street consensus forecast of $3.90 per share. Group worldwide sales, Deere said, rose 16% from last year to $11.33 billion, again topping analysts' forecasts of a $10.44 billion tally.
Looking into the end of the 2022 fiscal year Deer said it sees net income of between $6.5 billion and $7 billion, with solid demand for farm and construction equipment, increased infrastructure spending and favorable crop prices.
"At the same time, we anticipate supply-chain pressures will continue to pose challenges in our industries,' said CEO John May. "We are working closely with our suppliers to address these issues and ensure that our customers can deliver essential food and infrastructure more profitably and sustainably."
Deere's strong fourth-quarter and full-year performance was delivered by our dedicated employees, dealers, and suppliers throughout the world, who have helped safely maintain our operations and serve customers," May added. "Our results reflect strong end-market demand and our ability to continue serving customers while managing supply-chain issues and conducting contract negotiations with our largest union."
Deere shares were marked 5.3% higher in early trading immediately following the earnings release to change hands at $368.14 each, extending the stock's year-to-date gain to around 37.
Earlier this month, Deere reached an agreement with United Auto Workers members to end a six-week strike linked to pay and benefit demands.
UAW members at facilities in Illinois, Iowa and Kansas voted 61% to 39% in favor of the new agreement, with Deere saying it made "modest modifications" to its early November proposal -- rejected by the UAW -- which called for wage increases, improved healthcare benefits, pension boosts and a ratification bonus of $8,500.
"Last week's ratification of a 6-year agreement with the UAW brings our highly skilled employees back to work building the finest products in our industries," May said. "The agreement shows our ongoing commitment to delivering best-in-class wages and benefits."