RSS
Twitter
Linked In
News In
News
Linked In
RSS
https://twitter.com/Agrimoney
http://www.newsnow.co.uk/h/Industry+Sectors/Agriculture

You are viewing 1 of your 2 complimentary articles.

Register now to receive full access.

Already registered?

Login | Join us now

Deere upgrades profits hopes, sending shares to record high

Twitter Linkedin

Deere & Co shares soared to a clear record high after the farm equipment giant raised its forecast for full-year earnings, noting "signs of further stabilisation" in the global market, and a "strong recovery" in South America.

The maker of John Deere machinery raised by $500m to $2.0bn its forecast for group earnings for the year to October – a figure well ahead of the $1.49bn expected by Wall Street, and a result which would be the best in three years.

The upgrade reflected an increase to 9%, from 4%, in the forecast for equipment sales for the year – including a hike to 8%, from 3%, in expected expansion in sales of farm machinery.

Analysts had pencilled in group sales growth of 4.0%.

The revisions came as Deere reported "signs of further stabilisation" in market conditions, after a downturn fuelled by the dent to farm incomes from weaker crop prices.

"We are seeing modestly higher overall demand for our products, with farm machinery sales in South America experiencing a strong recovery," said Samuel Allen, the Deere chairman and chief executive.

'Improving economic and political conditions'

Indeed, the group revised to 20%, from 15-20%, its forecast for full-year growth in industry sales of farm equipment in South America, citing "improving economic and political conditions in Brazil and Argentina".

For North America, Deere now forecast industry sales falling by 5%, compared with previous guidance of a decline of 5-10%.

And for the European Union, the group flagged the potential for a flat market, or at worst a 5% decline, rather than the previous estimate of a straight -5% number.

However, the guidance comes at a time of renewed political tension in Brazil, after claims on Thursday that President Michel Temer had bribed a witness, allegations that sent the real tumbling – a factor which would, if it persists, weigh on imports, and contributions from Brazilian operations to parent companies such as Deere reporting in dollars.

Profits beat forecasts

The improved market conditions helped Deere & Co report a 5.2% rise to $8.29bn in sales in the three months to May 1, with results from construction and forestry particularly strong, lifted by higher sales volumes.

Earnings soared 62% to $802.4m, equivalent to $1.94 a share, excluding a gain on the sale of a partial interest in irrigation supplies SiteOne Landscape Supply.

Deere shares jumped to a record high of $121.33 in early deals in New York, before easing back to $120.80, a gain of 7.2% on the day.

By Mike Verdin

Twitter Linkedin
Related Stories

Festive staff shortages 'likely' as British growers cut ties with UK supermarkets

Faced with mounting concerns over labour shortages and fears they may not be able to fulfil retailer contracts, some British growers have sought to cut ties with UK supermarkets in favour of companies elsewhere in Europe.

Hard Brexit to have 'catastrophic' effect on European meat industry; new report

A hard Brexit will have a ‘catastrophic impact’ on the European meat industry, according to a report published by Europe’s meat industry body, UECBV, as the UK and EU continue negotiations.

Manufacturers stockpile agrochemicals in bid to keep post-Brexit prices down for farmers

Manufacturers of crop protection products are stockpiling agrochemicals in warehouses in a bid to keep input costs down for farmers after Brexit, according to the chief executive of the Crop Protection Association, Sarah Mukherjee.

Dairy groups sidestep shockwaves from GDT price slump

Indeed, shares in the likes of A2 and Beston soar. Still, that does not mean there are no losers from the dairy price falls...
Home | About | RSS | Commodities | Companies | Markets | Legal disclaimer | Privacy policy | Contact

Our Brands: Comtell | Feedinfo | FGInsight

© Agrimoney.com 2017

Agrimoney.com and Agrimoney are trademarks of Agrimoney Ltd
Agrimoney is part of the Briefing Media group
Agrimoney Ltd is registered in England & Wales. Registered number: 09239069