By Dhirendra Tripathi
Investing.com – Deere stock (NYSE:DE) traded 1.3% higher in premarket Friday after the company raised its annual forecast, banking on rising agricultural incomes supporting demand for its farm equipment.
The company expects 2022 net income to be $6.9 billion at the center of its guidance range, higher than the $6.75 billion figure it handed out earlier.
“Looking ahead, we expect demand for farm and construction equipment to continue benefiting from strong fundamentals," Chairman and CEO John C. May said in a statement. The company said, “the end-market demand remains favorable.”
Demand for its tractors and combines has stayed elevated for some quarters now. Thanks to record-high crop prices fueling farmers’ incomes; cash-rich farmers have thus looked to buy new machinery or upgrade to boost productivity.
Worldwide net sales and revenue rose 5% in the first quarter to $9.6 billion. Equipment operations net sales were $8.5 billion, compared with $8 billion in the first quarter of 2021.
Costs escalated more, rising 11%. Net profit thus fell to $903 million.