Farm equipment maker Deere & Co. (DE: Quote) lifted its earnings forecast for fiscal year 2012 after reporting its seventh consecutive quarterly earnings record in the first quarter. All divisions contributed to earnings growth.
The tractor company expects net income to be around $3.275 billion in 2012, compared to its previous forecast of around $3.2 billion.
Equipment sales are expected to increase 15 percent for the second quarter as well as fiscal 2012. This includes an unfavorable foreign exchange impact of about 3 percent for both periods.
The company expects sales of agriculture and turf equipment, which generates the major chunk of Deere's revenue, to increase by about 15 percent in 2012, including an unfavorable currency-translation effect of about 3 percent. This segment grew revenues by 8 percent in the first quarter.
Deere anticipates that its construction and forestry equipment sales, which climbed 22 percent in the first quarter, will rise by about 18 percent in 2012.
Both these segments benefited from higher shipment volumes and price realization in the quarter.
Samuel Allen, CEO of the company, said, "John Deere has started 2012 on a strong note...Maintaining such a high level of execution is especially noteworthy as we move ahead with major new-product launches and significantly expand our global market presence."
For the first quarter, net income attributable the company grew to $532.9 million or $1.30 per share from $513.7 million or $1.20 per share. On average, 18 analysts polled by Thomson Reuters expected earnings of $1.24 per share for the quarter. Analysts' estimates typically exclude special items.
Sales and revenues increased 11 percent to $6.767 billion, exceeding analysts' estimate of $6.50 billion.
"Our substantial investment in new products and additional capacity puts Deere on a sound footing to respond to further improvement in key markets that are in the early stages of recovery," Allen added.
The stock closed on Tuesday at $89.05, up from the previous close of $88.68, on a volume 4.42 million shares.
by RTT Staff Writer
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