Deere Shares Jump as Demand Improves

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"We are seeing modestly higher overall demand for our products, with farm machinery sales in South America experiencing a strong recovery", CEO Samuel Allen said in a statement. The average estimate of 11 analysts surveyed by Zacks Investment Research was for earnings of $1.70 per share.

Deere & Co's shares rose after it released results for the three months to April.

Deere said it now expects fiscal 2017 net income attributable to the company to be about $2 billion, up from $1.5 billion estimated previously.

Operating profit in the equipment group rose from $688 million in the year-ago quarter to $1.11 billion, driven primarily by price realizations, a favorable sales mix, positive exchange rate effects and higher shipment volumes and partially offset by higher warranty costs. (DE) on Friday reported fiscal second-quarter net income of $802.4 million. It now sees 2017 sales gaining 9% to around $25.5 billion, up from a prior forecast of 4% growth, and well ahead of analysts' view of $24.16 billion.

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The strong results are further evidence Deere is seeing further stabilization in the industry.

Total revenue increased to $8.29 billion from $7.88 billion, beating the FactSet consensus of $8.02 billion, as financial and other revenue were better than expected while agriculture and turf and construction and forestry revenue were in line with forecasts.

Shares rose 7% in premarket trading as the company topped profit expectations in its second quarter.

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