Deere profit jumps 62 percent (DE)

Reuters

Reuters

Deere & Co. (NYSE: DE) reported second-quarter fiscal 2017 results before markets opened Friday.

Total revenue rose 2.8% to $8 billion. Analysts had forecast earnings of $1.68 with $7.32 billion of equipment sales.

Deere said it now expects fiscal 2017 net income attributable to the company to be about $2 billion, up from $1.5 billion estimated previously.

Latin America is Deere's third-biggest market, accounting for about 9 percent of its total equipment sales. Net income rose from $393 million a year ago to $694 million.

The U.S. farm equipment maker also raised it fiscal 2017 equipment sales growth forecast to 9 per cent, from the previous 4 per cent forecast in February. For the year analysts expect EPS of $4.94 compared with $4.81 last year.

"We are seeing modestly higher overall demand for our products, with farm machinery sales in South America experiencing a strong recovery", Chief Executive Officer Samuel Allen, said in a press release. The company will gain from the implementation of operating plans and disciplined cost management as well as the impact of a broad product portfolio. "As a result, we have raised our forecast and are now calling for significantly higher earnings for the full year". That's the fifth consecutive quarter the company has beaten the consensus.

However, the guidance comes at a time of renewed political tension in Brazil, after claims on Thursday that President Michel Temer had bribed a witness, allegations that sent the real tumbling - a factor which would, if it persists, weigh on imports, and contributions from Brazilian operations to parent companies such as Deere reporting in dollars. The 52-week range is $76.73 to $114.96. The stock has climbed 36 percent in the last 12 months.