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(Reuters) -Deere & Co breezed past Wall Street estimates for third-quarter profit on Friday and raised its annual net income outlook on strong demand for large tractors, combines and precision agriculture equipment.
The world’s largest farm equipment maker now expects 2023 net income between $9.75 billion and $10.00 billion, compared with its previous outlook of $9.25 billion to $9.50 billion, after posting a 60% rise in quarterly profit.
Shares of the Moline, Illinois-based company were up 1% in premarket trading.
Deere (NYSE:DE), a barometer for the global economy, has maintained resilient operating profit margins despite volatility in markets worldwide, with demand from farmers looking for new equipment and parts to repair aging machinery bolstering the company’s sales.
Executives have reiterated that order books are still robust heading into next year.
“Fundamentals are expected to continue fueling solid demand for our equipment, supported by a strong advance-order position,” Deere CEO John May said in a statement.
Robust demand for its construction equipment has also propped up margins as the United States upgrades roads, railways and other transportation infrastructure under the Joe Biden administration’s $1 trillion package approved by the Senate in 2021.
Construction and forestry equipment sales increased 14% from the prior year.
Deere has leveraged price increases across its equipment lines to counter higher material and logistics costs. With supply-chain bottlenecks clearing up, the industrial giant boosted output capacity to reduce its production backlog.
Net income rose to $2.98 billion for the quarter ended July 31. Earnings per share came in at $10.20, outpacing analysts’ forecast of $8.20, according to Refinitiv data.
Worldwide net sales and revenue rose 12% to $15.80 billion.
