Deere & Co. (NYSE:DE) this morning posted higher quarterly earnings that topped estimates, prompting the world’s largest farm equipment maker to raise its full-year outlook as the farm sector booms on higher worldwide food demand.
Biofuels have helped drive up crop production, and as demand grows, farms are witnessing record-high income, which is passed along to Deere as farmers update their equipment.
Fiscal second-quarter net income rose to $1.056 billion, or $2.61 per share, from $904.3 million, or $2.12 a share, in the year-ago period. The results topped the average estimate from Thomson Reuters I/B/E/S of $2.53 per share.
Net sales of equipment operations rose to $9.4 billion, from $8.33 billion in the year-earlier quarter.
Net earnings were $3.91 per share for the first half of the year, up from $3.32 a year earlier.
Deere also raised its forecast for 2012 net income to about $3.35 billion, from $3.275 billion.
This year, U.S. farmers planted the largest corn crop in 75 years, creating greater need for tractors and combine harvesters.
Deere announced in March it planned to invest $70 million to expand large tractor production at its Waterloo, Iowa, facility. The company is already working on more than a dozen major plant expansions around the world, and plans to spend $1.3 billion on capital investments this year.
“Our extensive investments in new products and additional global capacity are moving ahead at an accelerated rate,” Samuel R. Allen, chairman and chief executive, said in a statement. “They put Deere in a sound position to respond to a rising global need for food, shelter, and infrastructure in the years ahead.”
Deere shares rose 1.08 percent this morning in pre-market trading.
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