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Shares of the world’s largest farm equipment maker were up 3.7%
before the bell.
The industrial bellwether, a barometer for the global economy,
has maintained strong profit margins despite recession concerns.
Demand from farmers has been strong, after elevated crop
commodities last year left producers with income to purchase new
equipment or upgrade their fleets.
Deere's margins have remained high as it has been able to raise
prices across its equipment divisions, offsetting rising
shipping costs and tight supply chains.
The company expects net income of $8.75 billion to $9.25 billion
for the year, higher than $8 billion to $8.5 billion estimated
previously.
Net income attributable to the company rose to $1.96 billion, or
$6.55 per share, for the first quarter ended Jan. 30 from $903
million, or $2.92 per share, a year earlier.
Total net sales and revenue rose to $12.65 billion from $9.57
billion for first fiscal quarter ending in January.
Executives said last quarter that Deere's North American order
books were full for the year for its high-horsepower tractors
and that the machinery-maker had sold out of combines ahead of
planting season.
Even though U.S. farm incomes are expected to fall for the first
time since 2019 due to higher production costs and a drop in
direct government payments, analysts said strong farm economics
still lean in the company's favor.
(Reporting by Aishwarya Nair in Bengaluru; Editing by Anil
D'Silva)
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