John Deere Posts Better Than Expected Profits

Paterniano Del Favero
Mag 20, 2017

Deere & Co shares soared to a clear record high after the farm equipment giant raised its forecast for full-year earnings, noting "signs of further stabilisation" in the global market, and a "strong recovery" in South America.

The improved market conditions helped Deere & Co report a 5.2% rise to $8.29bn in sales in the three months to May 1, with results from construction and forestry particularly strong, lifted by higher sales volumes. In addition, net equipment operations sales hit $7.260 billion for the present quarter, reaching $11.958 billion over the first six months; compared against $7.107 billion and $11.876 billion for the same periods from the year prior.

Deere and Company (NYSE: DE) reported fiscal second-quarter results that were well above expectations and provided an upbeat outlook.

Equipment sales at Deere are expected to move up 9% for its fiscal 2017 year and by 18% for its third quarter in comparison with the same 2016 periods.

In last quarter's release, Allen noted that the worst of that recession may be over.

On a per-share basis, the company said it had net income of $2.49.

Deere's share price has gained more than 40% over the past year. The company previously had projected $1.5 billion in net income on a 4 percent increase in net sales.

"Deere is demonstrating a continuing ability to produce impressive results through all phases of the business cycle", Allen said.

The U.S. farm equipment maker also raised it fiscal 2017 equipment sales growth forecast to 9 per cent, from the previous 4 per cent forecast in February.

Sales are expected to fall 5% in the USA amid a multi-year slump in prices for corn, wheat and soybeans, but that's at the low end of previous guidance for a 5%-10% decline.

Net receivables and leases financed by JDCC were $32.015 billion at April 30, 2017, compared with $33.208 billion at May 1, 2016.

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