Deere & Co on Wednesday reported a rise in quarterly earnings, defying Wall Street estimates, as higher crop prices, government subsidy payments and replacement demand lifted sales of farm machines.
The maker of John Deere and world's largest farm equipment producer forecast net income of US$3.6 billion-US$4.0 billion for fiscal 2021 as it expects to benefit from improving conditions in the farm economy and stabilization in the construction and forestry markets.The forecast is higher than a US$3.3 billion estimate from analysts surveyed by Refinitiv and the US$2.75 billion reported for 2020.
Deere's shares have outperformed the S&P 500 and gained 31per cent since its last earnings report in late August buoyed by a turnaround in the farm economy. They were up 2.4per cent at US$267.90 in pre-market trade. The rally marks a sharp reversal in fortunes for the U.S. agricultural economy after four years of global surplus grain stocks that have kept prices low.