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Shares of the world's largest farm equipment company rose 4.7%
in pre-market trade.
The Moline, Illinois-based company's net income rose 75% to
$2.25 billion, or $7.44 per share, topping a consensus forecast
of $7.11 earnings per share for the quarter ending in October.
Higher grain and soybean prices aided the machinery giant's
margins as farmers purchased new equipment or bought parts to
upgrade their fleet.
After missing analysts earnings expectations last quarter
because of its inability to secure parts from suppliers to
assemble large tractors, Deere reassured shareholders that
supply chain logjams are starting to abate and gave an
optimistic outlook for 2023.
"Deere is looking forward to another strong year in 2023 based
on positive farm fundamentals and fleet dynamics as well as an
increased investment in infrastructure," CEO John May said in a
statement.
The industrial bellwether expects net income between $8.0
billion to $8.5 billion for fiscal year 2023, along with higher
sales.
Deere has continued to capitalize on higher commodity prices
since the most traded crops hovered around 10-year highs earlier
this year. The company has outperformed the broader market with
shares trading up 19% year to date.
The farm equipment maker's earnings beat mirrored rival
Caterpillar Inc's third-quarter results. Caterpillar also
benefited from raising prices on equipment to help offset rising
raw material and production costs.
Operating profit for Deere's construction and forestry equipment
grew 53% from a year earlier, while precision agriculture
products saw the biggest increase, rising 124%.
Total net sales and revenue jumped 37% to $15.54 billion.
Equipment net sales rose to $14.35 billion, topping estimates of
$13.39 billion, according to Refinitiv.
(Reporting by Aishwarya Nair in Bengaluru and Bianca Flowers in
Chicaco; editing by Anil D'Silva and Jason Neely)
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