Bloomberg News

Deere Earnings Top Estimates After Record U.S. Farmer Income

February 15, 2012

Feb. 15 (Bloomberg) -- Deere & Co., the world’s largest maker of agricultural equipment, reported fiscal first-quarter profit and forecast 2012 earnings that topped analysts’ estimates after U.S. farming income climbed to a record.

Net income rose 3.7 percent to $532.9 million, or $1.30 a share, in the quarter ended Jan. 31, from $513.7 million, or $1.20, a year earlier, Moline, Illinois-based Deere said today in a statement. That topped the average $1.24-a-share profit estimate of 18 analysts surveyed by Bloomberg.

Fiscal 2012 profit will rise to about $3.28 billion, up from $3.2 billion forecast in November, the company said. That’s more than the $3.18 billion average estimate of 15 analysts.

U.S. farmers’ net income increased to $98.1 billion in 2011, according to the U.S. Department of Agriculture said Feb. 13. This year they will plant the biggest corn crop since World War II, spurred on by the highest prices in at least four decades, according to a Bloomberg survey of farmers, bankers and analysts. Sales of Deere’s signature green and yellow equipment are also gaining in developing nations on higher food demand.

“Most markets should be pretty healthy,” Eli Lustgarten, an analyst for Independence, Ohio-based Longbow Securities who has a “buy” rating on the shares, said in an interview on Feb. 13. Deere “warned about costs but demand is good.”

Deere rose 0.4 percent to $89.05 in New York yesterday. The shares have dropped 6 percent in the past year.

The company on Nov. 23 forecast first-quarter profit would “fall short” of a year ago, partly on higher raw-material costs, as sales gained 16 to 18 percent.

Chief Executive Officer Samuel R. Allen aims to boost sales 56 percent to $50 billion by 2018 from a record $32 billion in fiscal 2011. The company also has a target to increase the proportion of revenue from outside the U.S. and Canada to 50 percent from 39 percent last year.

The company in the last year has introduced a record number of tractors, combines and harvesters to court farmers overseas. It has also announced plans to build seven factories in China, Brazil and India.

(Deere will hold a conference call at 10 a.m. New York time. Dial +1-212-547-0316, pass code 2215.)

--Editors: Simon Casey, Steven Frank

To contact the reporter on this story: Shruti Date Singh in Chicago at

To contact the editor responsible for this story: Simon Casey at

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