Deere & Company (NYSE: DE) reported higher than expected fiscal first-quarter earnings and revenue on Wednesday and raised its outlook on fiscal 2013 earnings as the world’s largest agricultural equipment supplier anticipates strong demand for its products in coming quarters as farmers in the U.S. are likely to sow huge amounts of corn and soybeans seeds this year after witnessing worst drought in the U.S. Midwest in 56 years in last summer.
“Relatively high commodity prices and strong farm incomes are expected to continue supporting a favorable level of demand for farm machinery during the year,” said the Company in a statement.
Earlier this week, the U.S. Agriculture Department said that farm income would climb by 15% to record $127.6 billion, in 2013.
Deere expects equipment sales to increase by 6% in fiscal 2013 while in the fiscal second quarter it anticipates 4% growth in equipment sales from the year earlier quarter. The Company now expects full-year profit at $3.3 billion, up from its initial forecast of $3.2 billion.
For the fiscal first quarter ended Jan 31, the company reported adjusted earnings of $649.7 million or $1.65 per share compared to a profit of $532.9 million or $1.30 a share in the year-earlier period.
Addressing analysts in a conference call, Deere’s Chairman and Chief executive Samuel R. Allen said that the Company has now posted record earnings for the eleventh straight quarter.
Revenue during period came at $7.42 billion, up from $6.72 billion, in the same quarter of last year.
Revenue from agricultural and turf equipment division, which accounts nearly three-quarters of company’s entire revenue, climbed 16% in the fiscal first quarter.
Analysts polled by Thomson Reuters were expecting Deere to report earnings of $1.40 a share on revenue of $6.73 billion.
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