Thanks in part to grain prices rising along with farmers’ profits, Quad Cities-based Deere and Company is reporting earnings that its executives contend exceed expectations.
Tony Huegel, Deere’s manager of investor communications, says Deere is continuing to see the benefit of "improving conditions in the global farm sector."
Deere is reporting second quarter net income of $624 million on equipment operations net sales of $6.3 billion.
Huegel says many U.S. farmers are reaping the rewards of higher corn prices due to a boost in demand for ethanol. "Second quarter total worldwide equipment sales were up four percent compared to the prior year quarter, however shipment volumes were flat in the quarter."
He says retail sales for agricultural equipment in the U.S. and Canada were up one percent for the quarter. "For utility tractors, the industry was up seven percent. Deere was down a single digit. Row crop tractors, the industry was up 14 percent. Deere was up double digits, but less than the industry," he says. "Four-wheel-drive tractors, the industry was up 40-percent, Deere was up double-digits, but less than the industry."
Deere’s overall earnings of $624 million for the quarter are down from the $744 million mark of a year ago, but Deere spokesman Ken Golden says the year-ago figure included the sale of the health care division. Golden says Deere’s calculation shows net income from continuing operations actually reached an all-time high in the second quarter of 2007.