Farm and construction equipment maker Deere & Co. said Wednesday that its first-quarter net income leaped 22 percent on growing sales of farm machinery at higher prices.
The Moline, Ill, company's earnings soundly beat Wall Street expectations.
In the quarter ending Jan. 31, Deere said it earned $649.7 million, or $1.65 per share, compared with $532.9 million, or $1.30 per share, a year earlier. Revenue rose almost 10 percent to $7.42 billion. Analysts surveyed by data provider FactSet expected earnings of $1.39 per share on revenue of $6.73 billion.
Deere is executing its marketing plans, expanding its global presence and keeping a tight grip on costs, Chairman and CEO Samuel Allen said in a statement.
The company predicted that sales would rise about 4 percent in the second quarter and 6 percent for the full year. It expects 2013 net income of about $3.3 billion, slightly more than its earlier forecasts and the predictions of analysts.
But Allen cautioned that although Deere sees strong future results on growing need for food, shelter and infrastructure, "the near-term outlook is being tempered by uncertainties over fiscal, economic and trade issues that are undermining business confidence and restraining growth."
After rising initially as high as $98.71, Deere shares turned lower and were down 2 cents at $93.95 in premarket trading just over an hour before Wednesday's opening bell.
Deere is the world's largest maker of agricultural equipment, like the bright green tractors and combines that roll on farm fields during planting and harvest seasons. Its fortunes rise and fall with those of farmers. The company said farm business should be good this year, predicting that agriculture and turf equipment sales would rise by about 6 percent.
"Relatively high commodity prices and strong farm incomes are expected to continue supporting a favorable level of demand for farm machinery during the year," the company's statement said.
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