Published: Fri, May 19, 2017
Money | By Armando Alvarado

Deere Shares Jump as Demand Improves

Deere Shares Jump as Demand Improves

Deere & Co reported on Friday a 62 percent jump in quarterly profit, helped by improving demand for its products, and the USA farm equipment maker raised its fiscal 2017 financial forecast. Deere sees net income of about $2 billion, up from its previous estimate of around $1.5 billion.

Total sales and revenue rose 5.2 per cent to $8.29-billion.

Updated outlook for fiscal 2017: Equipment sales and net sales are projected to increase about 9% (vs.an increase of 4%), while net income is anticipated to be about $2B (vs. $1.5B).

Deere & Co. (NYSE: DE) reported second-quarter fiscal 2017 results before markets opened Friday.

The maker of John Deere machinery raised by $500m to $2.0bn its forecast for group earnings for the year to October - a figure well ahead of the $1.49bn expected by Wall Street, and a result which would be the best in three years.

Analysts on average were expecting earnings of $1.68 cents per share, according to Thomson Reuters I/B/E/S.

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Latin America is Deere's third-biggest market, accounting for about 9 percent of its total equipment sales.

Analysts have forecast fiscal year sales of $24.32 billion, about 5% higher than sales of $23.39 billion in 2016.

"We are seeing modestly higher overall demand for our products, with farm machinery sales in South America experiencing a strong recovery", Chief executive Samuel Allen said in a statement. The company will gain from the implementation of operating plans and disciplined cost management as well as the impact of a broad product portfolio.

Deere beat last year's quarterly EPS by 60% and the consensus estimate by 48%.

Deere also lifted its full-year 2017 revenue guidance. The stock has climbed 36 percent in the last 12 months.

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