Deere profit jumps 62 percent (DE)

Gladys Abbott
May 20, 2017

This was Deere's best second quarter since 2014. That compared with $69.6 million and $169.4 million for the respective periods past year.

Net income for the quarter to April 30 rose to $802.4 million, or $2.49 a share, from $495.4 million, or $1.56 a share, in the same period a year ago. Sales were strongest overseas - equipment net sales in the United States and Canada decreased 5 percent for the quarter, and were down 6 percent for the first six months.

Deere and Company (NYSE: DE) reported fiscal second-quarter results that were well above expectations and provided an upbeat outlook. The stock has climbed 36 percent in the last 12 months.

Outside the US and Canada region, the company saw a jump in sales of 14% for the just ended quarter and 13% for the fiscal year's first six months.

Fiscal-year 2017 net income for the financial services operations is expected to be approximately $475 million.

In last quarter's release, Allen noted that the worst of that recession may be over.

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Deere's share price has gained more than 40% over the past year. The company now expects sales to rise 9% through October, up from its earlier estimate of about a 4% increase.

The strong results are further evidence Deere is seeing further stabilization in the industry.

Despite weak global agricultural sectors, Deere continues to perform well, driven by ongoing success of developing a more durable business model and a wider range of revenue sources. The consensus 12-month price target was $112.72 before the report.

The U.S. farm equipment maker also raised it fiscal 2017 equipment sales growth forecast to 9 per cent, from the previous 4 per cent forecast in February. The decline is affecting both large and small equipment. In South America, industry sales of tractors and combines are projected to be up about 20% as a result of improving economic and political conditions in Brazil and Argentina.

Industry sales of turf and utility equipment in the US and Canada are expected to be about flat for 2017.

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