Farm & construction machinery maker Deere & Co. (DE) reported Wednesday a profit for the second quarter that grew three percent from last year, driven by higher sales of farm machinery. Both earnings per share and quarterly revenues topped analysts' expectations.
However, Deere trimmed its annual sales growth outlook due in part to the U.S. cold snap that has delayed planting. The company maintained its fiscal-year profit forecast.
"After a record-setting second quarter, John Deere is well on its way to another year of strong performance. Deere's results are a reflection of positive conditions in the global farm economy, which continues to show impressive strength," Chairman and CEO Samuel Allen said in a statement.
The Moline, Illinois-based world's largest maker of agricultural equipments reported a record quarterly net income of $1.08 billion or $2.76 per share for the second quarter, higher than $1.06 billion or $2.61 per share in the prior-year quarter.
On average, 16 analysts polled by Thomson Reuters expected the company to report earnings of $2.72 per share for the quarter. Analysts' estimates typically exclude special items.
Deere's credit subsidiary, John Deere Capital Corp. reported a higher attributable net income of $105.9 million for the second quarter from $78.3 million, mainly on growth in credit portfolio, partially offset by higher selling, administrative and general expenses.
Worldwide net sales for the quarter increased 9 percent to a quarterly record of $10.27 billion from $9.40 billion in the same quarter last year, and topped ten Wall Street analysts' consensus estimate of $9.81 billion. Total net sales and revenues also grew 9 percent to $10.91 billion from a year ago.
Sales included price realization of 3 percent and an unfavorable currency-translation effect of 2 percent.
Agriculture and turf sales increased 12 percent to $8.69 billion, due to higher shipment volumes and price realization. Construction and forestry sales decreased 6 percent to $1.57 billion, mainly due to lower shipment volumes. Financial services revenues grew 10 percent to $536 million from last year.
Equipment net sales in the U.S. and Canada increased 9 percent, and sales were also up 9 percent outside the U.S. and Canada, despite unfavorable currency-translation effects of 4 percent.
Looking ahead to the third quarter, the company said equipment sales are estimated to increase about 3 percent from last year, while analysts estimate revenues of $9.35 billion.
For fiscal 2013, Deere trimmed its equipment sales growth guidance to about 5 percent from the prior forecast of 6 percent, and said it continues to anticipate net income of about $3.3 billion. Street is currently looking for full-year 2013 earnings of $8.60 per share on annual revenues of $35.41 billion.
"Deere's near-term forecast is being tempered by lingering economic concerns in many parts of the world, which are restraining business confidence and growth. In addition, cool, wet weather in North America has delayed crop planting, slowed construction activity and hurt sales of turf-care equipment," Allen added.
However, Allen added that he remained confident about the long-term prospects as it invests in new products and additional capacity.
DE closed Tuesday's regular trading session at $93.77, up $1.28 on a volume of 3.66 million shares. In the past 52-week period, the stock has been trading in a range of $69.51 to $95.60.
For comments and feedback: editorial@rttnews.com