Deere & Co. (DE) posted better-than-expected second quarter earnings Friday, and boosted its full-year profit forecast as farm equipment demand looks set to outpace inflation and supply-chain pressures that are disrupting delivery schedules.
Deere said earnings for the three months ending on May 1, the group's fiscal second quarter, came in at $6.81 per share, up 19.9% from the same period last year and 10 cents ahead of the Street consensus forecast. Group worldwide sales, Deere said, rose 11% from last year to $13.37 billion, narrowly topping analysts' forecasts of a $13.36 billion tally.
Looking into the end of the 2022 fiscal year Deer said it sees net income of between $7 billion and $7.4 billion, up from its prior forecast of $6.7 billion and $7.1 billion, with solid demand for farm and construction equipment, increased infrastructure spending and favorable crop prices.
"Deere's second-quarter performance reflected a continuation of strong demand even as we face supply-chain pressures affecting production levels and delivery schedules," said CEO John May. "Deere employees, suppliers, and dealers are working hard to address these challenges. We are proud of their extraordinary efforts to get products to our customers as soon as possible under the challenging circumstances."
"Looking ahead, we believe demand for farm equipment will continue benefiting from positive fundamentals in spite of availability concerns and inflationary pressures affecting our customers' input costs," May added. "The company's smart industrial strategy and recently announced Leap Ambitions are focused on helping customers manage higher costs and increasingly scarce inputs, while improving their yields, through the use of our integrated technologies."
Deere shares, which hit a record high of $446.76 in March, were marked 8.1% lower in early trading following the earnings release to change hands at $335.00 each.
