Deere profit surge fueled by demand for agricultural equipment

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Deere & Co beat market estimates for quarterly profits on Wednesday as a surge in crop and livestock prices encouraged farmers to splurge on tractors and combines.
The results sent shares of the world’s largest farm equipment maker up 3% in premarket trading and allayed some fears about the impact of a workers’ strike that had plagued Deere’s operations for about three weeks. of the fourth quarter.
Rising corn and soybean prices this year have improved financial prospects for farmers, with the U.S. Department of Agriculture estimating that net farm income is expected to rise 19.5% to $113 billion in 2021.
This boosted farm equipment sales despite manufacturers’ price hikes. Deere said sales of its large and medium equipment jumped 23% in the quarter, while sales of small farm and turf equipment rose 17%.
The company raised prices by 8% for its large and midsize equipment orders to offset rising inflation, helping to inflate its margins.
Net income rose to $1.28 billion, or $4.12 per share, in the quarter to Oct. 31 from $757 million, or $2.39 per share, a year earlier. Analysts on average had expected earnings of $3.90 per share, according to Refinitiv.
Deere equipment sales rose 19% to $10.28 billion, below expectations of $10.44 billion.
Earlier this month, the company agreed to a new deal with its workers belonging to the United Auto Workers union, ending a nearly six-week strike.
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