Farm equipment maker Deere & Co. (DE) lifted its earnings forecast for fiscal-year 2012 yet again after reporting better-than-expected earnings and revenues for the second quarter, helped by a strong farm economy. The company noted it achieved its eighth consecutive quarterly earnings record in the quarter.
For the year, the tractor company now expects net income to be around $3.35 billion, up from the prior forecast of about $3.275 billion, which itself was higher than the original forecast of $3.2 billion. Equipment sales for the year are projected to increase by nearly 15 percent.
Second-quarter net income attributable to the company grew to $1.06 billion or $2.61 per share from $904.3 million or $2.12 per share reported last year. On average, 17 analysts polled by Thomson Reuters expected earnings per share of $2.53. Analysts' estimates typically exclude one-time items.
Total net sales and revenues for the quarter grew 12 percent to $10.01 billion, beating analysts' estimate of $9.70 billion. Sales included price realization of 5 percent and an unfavorable currency-translation effect of 2 percent, the company said.
During the quarter, Deere's equipment operations reported sales growth of 13 percent and posted higher operating profit helped by price realizations and higher shipment volumes.
Equipment net sales in the U.S., and Canada increased 18 percent from last year. Outside the U.S. and Canada, net sales were up 6 percent.
Samuel Allen, chairman and chief executive officer of the company said, "Our results are a reflection of positive conditions in the global farm economy, which is continuing to show impressive strength and endurance."
Looking ahead, for the third quarter, the company expects equipment sales to increase about 25 percent from the previous year.
Allen stated, "Our extensive investments in new products and additional global capacity are moving ahead at an accelerated rate. These investments are essential to the success of our longer-term growth objectives, which we believe are firmly on track."
DE is currently trading at $75.95, down $0.67 or 0.87 percent, on a volume of 253 thousand shares on the NYSE.
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