Deere Sows Seeds of Growth From Trade Pact

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It's sunshine and green shoots for agriculture and turf equipment maker Deere  (DE) - Get Deere & Company Report after the company posted fiscal first-quarter earnings on Friday that handily beat analysts’ forecasts and reiterated its fiscal 2020 profit guidance.

The Moline, Ill-based company said it earned $517 million, or $1.63 a share, in its fiscal first quarter ended Feb. 2, up from $498 million, or $1.54 a share, in the comparable year-earlier period. Analysts polled by FactSet had been expecting earnings of $1.29 a share.

Sales rang in at $7.63 billion, down from $7.98 billion a year ago though ahead of analysts’ forecasts of $6.22 billion.

Stabilization in the farming sector thanks to reduced trade tensions in the wake of the U.S.-China phase one trade deal and expectations for stronger farm exports helped drive sales in the company's most recent quarter, according to CEO John May.

While that was offset by a drop in sales of manufacturing and forestry equipment, the sunny outlook from the U.S. farm sector should help boost sales and profits going forward, May said.

Shares of Deere took off on Friday following the stronger-than-expected numbers, gaining more than 7% in morning trading. The stock, which had been down more than 4% so far this year, is now within a few percentage points of its 52-week high of $180.48.

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