Caterpillar January Sales Jump 49%, CAT Profit Soars on Farm Machinery Purchases

Deere & Company DE-Quote, the world’s largest maker of agricultural equipment, said on Wednesday that its quarterly net income had more than doubled as rising crop prices encouraged farmers to buy new machinery and increase planting.

The company also raised its earnings prediction for the year. 

Deere’s sales increase was driven by demand for heavy farm equipment, with revenue for four-wheel-drive tractors and large combines rising more than 50 percent.

Deere is expanding overseas operations, but its sales are rooted in North America, with United States and Canadian sales rising 35 percent in the quarter. Outside those core regions, sales rose 22 percent in the quarter.

The company said it earned $513.7 million, or $1.20 a share, in the quarter, up from $243.2 million, or 57 cents a share, a year earlier. Revenue in the period, which ended Jan. 31 and was the first quarter of Deere’s fiscal year, rose 27 percent, to $6.12 billion, from $4.83 billion.

Stock in Deere, which is based in Moline, Ill., rose $2.24, to $95.86 a share.

Deere said construction demand was up as well. Construction and forestry sales climbed 81 percent, and the unit turned an operating profit in the quarter after losing money a year earlier. Deere predicts net income this fiscal year of about $2.5 billion, up from a November prediction of $2.1 billion. Analysts currently predict $2.37 billion.

Disclosure I am Long DE shares.