Deere & Co. is forecasting its 2023 net income to be in the range of $9.25 billion to $9.5 billion citing “healthy demand” for its farm and construction equipment and an “improved operating environment.”
The Moline-based manufacturer improved its forecast as it released earnings Friday, May 19, for the second quarter that ended April 30. Deere reported that net sales and revenues increased 30% in the quarter and 31% for the first six months.
Net income was $2.860 billion, or $9.65 per share, for the quarter, which compared to $2.098 billion, or $6.81 per share, for the same period last year. For the first six months, Deere’s net income was $4.819 billion, or $16.18 per share, compared with $3.001 billion, or $9.72 per share, for the same period last year.
Net sales were $16.079 billion for the quarter and $27.481 billion for six months, compared with $12.034 billion and $20.565 billion last year.
“As shown by the company’s outstanding second-quarter results, Deere continues to benefit from favorable market conditions and an improving operating environment,” Deere Chairman and CEO John May said in the earnings release.
He added: “We also are being helped by the sound execution of our business plans by our employees, dealers, and suppliers. They are doing an exceptional job meeting demand for our products and serving customers.”
While Deere continues to be challenged by supply-chain constraints, Mr. May said “we are seeing further improvement.”
The company’s quarterly performance beat expectations on Wall Street, where the FactSet consensus for earnings per share was $8.58 and $14.89 billion for sales.
The results benefited from higher retail sales in John Deere production and precision agriculture division, which posted a 53% increase in revenues. Sales also rose in small ag and turf machinery (+16%) and in construction and forestry, which posted a 23% increase.
The report sent Deere’s stock up in trading Friday morning. As of mid-morning, Deere’s stock price was up $12.20, or 3.29%, at $382.72.
“Based on Deere’s results to date, it’s clear we are well on our way to another year of exceptional achievement,” Mr. May said in the release. “This is due in no small part to the success of our smart industrial operating model and our ability to provide value to our customers by helping them be more profitable, productive, and sustainable.”
The company increased its full-year net income to between $9.25 billion and $9.50 billion from a previous forecast range of $8.75 billion to $9.25 billion.
