Deere announces record Q1 earnings of $650 million
By CNW Group
Feb. 13, 2013, Moline, IL - Farm and construction equipment maker Deere & Co. has said that its first-quarter net income leaped 22 per cent on growing sales of farm machinery at higher prices.
The Moline, Ill., company's earnings soundly beat Wall Street expectations.
In the quarter ending Jan. 31, Deere said it earned $649.7 million, or $1.65 per share, compared with $532.9 million, or $1.30 per share, a year earlier. Revenue rose almost 10 per cent to $7.42 billion.
Analysts surveyed by FactSet expected earnings of $1.39 per share on revenue of $6.73 billion.
Deere is executing its marketing plans, expanding its global presence and keeping a tight grip on costs, Chairman and CEO Samuel Allen said in a statement.
The company predicted that sales would rise about 4 per cent in the second quarter and 6 per cent for the full year. It expects 2013 net income of about $3.3 billion, slightly more than its earlier forecasts and the predictions of analysts.
But Allen cautioned that although Deere sees strong future results on growing need for food, shelter and infrastructure, "the near-term outlook is being tempered by uncertainties over fiscal, economic and trade issues that are undermining business confidence and restraining growth.''
After rising initially as high as $98.71, Deere shares turned lower and were down 33 cents to $93.64 in trading about 45 minutes before Wednesday's opening bell.
Deere is the world's largest maker of agricultural equipment, like the bright green tractors and combines that roll on farm fields during planting and harvest seasons. Its fortunes rise and fall with those of farmers. The company said farm business should be good this year, predicting that agriculture and turf equipment sales would rise by about 6 per cent, with a 5 per cent increase over last year's strong numbers in the U.S. and Canada.
"Relatively high commodity prices and strong farm incomes are expected to continue supporting a favourable level of demand for farm machinery during the year,'' the company's statement said.
It also predicted that European agricultural and turf sales would fall 5 per cent due to economic weakness and a poor harvest last year in the United Kingdom. But South American agricultural sales are expected to rise 10 per cent to 15 per cent on strong conditions in Brazil. Asian sales are projected to be only slightly higher than last year.
In addition to farm equipment, Deere makes construction and forestry equipment such as backhoes, excavators, riding mowers and leaf blowers, making the company sensitive to movements in the global economy. But Deere predicted that worldwide construction and forestry equipment sales would rise 3 per cent this year on higher international sales of construction equipment.