Deere Expects More Machinery Sales as Crop Prices Rise--Update
November 25 2020 - 8:32AM
Dow Jones News
By Bob Tita
Deere & Co. raised expectations for profits next year,
anticipating that higher crop prices will lead to improving demand
from U.S. farmers for its tractors and harvesting combines.
Dry weather in the U.S. this summer contributed to a less robust
harvest than anticipated, as demand for wheat, soybeans and corn
rose due to higher consumption of dinners and baked goods at home
during the coronavirus pandemic. That helped to shrink grain
stockpiles and pushed up crop prices, which have also benefited
this year from rising exports including to China.
For Deere, the result is a better outlook for demand from
farmers for its green-and-yellow machinery. Deere said Wednesday
that it expects net income next year in a range of $3.6 billion to
$4 billion. It earned $2.75 billion in fiscal 2020, which ended
Nov. 1.
Shares rose 1.7% at $266.50 in pre-market trading.
The company, based in Moline, Ill., reported a 5% increase in
profit for its latest quarter, despite a 1% decline in equipment
sales compared with the same period last year. The company reported
net income of $757 million for the quarter, or $2.39 a share,
compared with $722 million, $2.27 a share, during the same period
last year.
Net equipment sales, including Deere's construction and forestry
machinery, were $8.65 billion. Analysts were expecting earnings of
$1.49 a share and $7.56 billion of equipment sales, according to
FactSet.
Write to Bob Tita at robert.tita@wsj.com
(END) Dow Jones Newswires
November 25, 2020 08:17 ET (13:17 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.
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