MOLINE, Ill. -- Despite weaker crop prices and nervous American farmers, Deere & Co. reported better-than-expected earnings on strong international farm equipment sales and higher demand for construction equipment as U.S. home sales take off.
The company doubled its profit forecast for the year and investors took note, sending the stock to a record high.
Sales worldwide increased 2 percent in the quarter despite a drag in the U.S. and Canada, where sales fell 5 percent. Outside the U.S. and Canada, net sales increased 14 percent and were particularly strong in South America.
Sales in construction and forestry equipment rose 7 percent in the quarter and Deere expects those numbers to jump about 13 percent for the year. Those numbers are being driven by an American housing market that appears ready to go.
After a couple of down months, economists said this week that they expect the U.S. housing market to take off.
The agricultural equipment manufacturer reported second-quarter net income of $802.4 million, compared with $495.4 million for the same period last year.
On a per-share basis, the Moline, Illinois, company posted net income of $2.49, easily surpassing the $1.56 per share for last year's second quarter and beating Wall Street expectations. Wall Street expected per-share earnings of $1.70, according to a poll by Zacks Investment Research.
Deere raised its full-year 2017 earnings forecast to $2 billion on a 9 percent increase in sales. The company had previously projected $1.5 billion in net income on 4 percent increase in net sales. The company posted earnings of $1.52 billion for 2016.
Quarterly revenue reached $8.29 billion. Its adjusted revenue was $7.26 billion, which also topped Street forecasts. The company had revenue of $7.1 billion in the same period last year.
Groups representing American farmers have expressed concern over President Trump's promise to renegotiate the North American Free Trade Agreement, which has largely been a boon for American farmers since it was implemented in 1994.
Investors showed less concern Friday, sending Deere shares up nearly 8 percent to a record $122.24.
This story was generated in part by Automated Insights (http://automatedinsights.com/ap) using data from Zacks Investment Research. Access a Zacks stock report on DE at https://www.zacks.com/ap/DE
Keywords: Deere, Earnings Report