Deere’s Q2 profit exceeds expectations with strong sales, raises annual income outlook
Deere & Company’s shares rose nearly 3% on Friday as the world’s largest tractor manufacturer reported an impressive second-quarter performance that exceeded expectations, driven primarily by increased demand for farming equipment and machinery. This strong performance, coupled with the favourable outlook for the remainder of the year, has prompted the company to raise its annual income outlook.
Strong sales drive Deere’s Q2 profit
During the second quarter, Deere’s net income rose to $1.79 billion, or $5.68 per share, from $666 million, or $2.11 per share, last year. This significant increase in earnings was largely due to a 30% year-over-year increase in equipment sales, which brought in a staggering $11.05 billion in revenue. Deere’s global business units, including agriculture and turf, construction and forestry, and financial service, all recorded strong sales and contributed to the company’s impressive revenue figures.
Raising the annual income outlook
Deere’s performance in the second quarter has prompted the company to raise its annual income outlook. The company now expects net income for its fiscal year to be between $5.3 billion and $5.7 billion, compared to its previous outlook of $4.6 billion to $5 billion. Deere’s chairman and CEO, John C. May, said in a statement that the increased outlook is a reflection of the company’s “strong execution combined with broad-based market conditions that are driving strong demand for our products and services.”
Deere’s strong second-quarter performance and increased outlook reflect the favourable market conditions, including the recent U.S. stimulus package and the large-scale infrastructure investments around the world. The increased demand for agricultural equipment and machinery is expected to remain strong through 2021, and Deere is well-positioned to meet the continued demand for its products and services.
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Deere & Company reported an impressive second-quarter performance driven by increased demand for farming equipment and machinery, leading to a net income of $1.79 billion, largely due to a 30% year-over-year increase in equipment sales. The strong sales resulted in the company raising its annual income outlook from $4.6 billion to $5 billion to $5.3 billion to $5.7 billion. Deere has benefitted from favourable market conditions and economic stimuli, and the increased demand for its products and services is expected to continue strong in 2021. #BUSINESS