Investing.com – Deere stock (NYSE:DE) traded 1.4% higher in Friday’s premarket as the company revised its outlook after strong demand for its farm and construction equipment doubled its profit in the third quarter.
Higher offtake of its equipment and improved realizations drove the operational performance of the company in the quarter ended August 1. The pandemic has disrupted global supply chains and led to higher demand for commodities, farm and non-farm. Equipment makers of all hues have benefited as economies have boomed and demand has come from farms and mines alike.
As a percentage of net sales, Deere's costs and expenses, relative to net sales, fell by 1 percentage point from a year earlier.
Net income is now seen in a range of $5.7 billion to $5.9 billion, up from the $5.3 billion-$5.7 billion range given by the company in May. The midpoint of the new range is over 5% higher than the previous range's. Deere's revised earnings estimate assumes an 8% gain in prices for large farm machines, Reuters said.
“Looking ahead, we expect demand for farm and construction equipment to continue benefiting from favorable fundamentals,” John C. May, chairman and chief executive officer of the company, said in a note.
Net income of $1.67 billion was more than double last year's $811 million. Net sales were 29% higher at $11.52 billion and comfortably topped the analysts’ estimate of $10.3 billion.