woodlandfarms
Super Member
- Joined
- Jul 31, 2006
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- 6,139
- Location
- Los Angeles / SW Washington
- Tractor
- PowerTrac 1850, Kubota RTV x900
CHICAGO (Reuters) - Deere & Co (DE.N) reported higher quarterly earnings on Wednesday as soaring crop prices boosted global demand for its agricultural equipment, but the company's forecast for the rest of the year was below Wall Street expectations and the stock fell 6 percent.
The company forecast earnings for the current quarter and full year that one analyst called "conservative." Deere cited persistently high costs for raw materials and component parts.
The world's largest maker of tractors and combines said profit rose 22 percent to $763.5 million, or $1.74 a share, in its fiscal second quarter ended April 30, from $623.6 million, or $1.36 a share, a year earlier.
Revenue increased 18 percent to $8.1 billion, lifted by a 46 percent jump in equipment sales outside the United States and Canada.
Analysts on average had expected the Moline, Illinois-based company to report earnings of $1.74 a share on revenue of $7.62 billion, according to Reuters Estimates.
Deere warned, however, that "escalating raw material costs and the availability of various parts and components are expected to have an impact on operations for the balance of the year."
As a result, the company said it expects net profit of $550 million to $575 million for the third quarter and $2.2 billion for the full year.
Eli Lustgarten, an analyst at Longbow Research, said that translates to earnings per share of $1.25 to $1.30 for the third quarter and $5 for the full year. Analysts, on average, forecast $1.49 for the quarter and $5.20 for the year, according to Reuters Estimates.
Lustgarten said of the second-quarter results, "It's a good quarter. But it didn't knock the socks off anyone and the guidance is very conservative."
Deere and rival farm equipment makers CNH Global NV (CNH.N) and Agco Corp (AG.N) are enjoying record demand for their products thanks to the surge in investment in biofuels and increased consumption in the developing world.
Deere shares fell to $84.73 in premarket trading, down from a Tuesday close at $90.19 on the New York Stock Exchange.
The company forecast earnings for the current quarter and full year that one analyst called "conservative." Deere cited persistently high costs for raw materials and component parts.
The world's largest maker of tractors and combines said profit rose 22 percent to $763.5 million, or $1.74 a share, in its fiscal second quarter ended April 30, from $623.6 million, or $1.36 a share, a year earlier.
Revenue increased 18 percent to $8.1 billion, lifted by a 46 percent jump in equipment sales outside the United States and Canada.
Analysts on average had expected the Moline, Illinois-based company to report earnings of $1.74 a share on revenue of $7.62 billion, according to Reuters Estimates.
Deere warned, however, that "escalating raw material costs and the availability of various parts and components are expected to have an impact on operations for the balance of the year."
As a result, the company said it expects net profit of $550 million to $575 million for the third quarter and $2.2 billion for the full year.
Eli Lustgarten, an analyst at Longbow Research, said that translates to earnings per share of $1.25 to $1.30 for the third quarter and $5 for the full year. Analysts, on average, forecast $1.49 for the quarter and $5.20 for the year, according to Reuters Estimates.
Lustgarten said of the second-quarter results, "It's a good quarter. But it didn't knock the socks off anyone and the guidance is very conservative."
Deere and rival farm equipment makers CNH Global NV (CNH.N) and Agco Corp (AG.N) are enjoying record demand for their products thanks to the surge in investment in biofuels and increased consumption in the developing world.
Deere shares fell to $84.73 in premarket trading, down from a Tuesday close at $90.19 on the New York Stock Exchange.
