(Photo credit: AP Photo/Abilene Reporter-News, Nellie Doneva)
Deere thinks the worst might be over for the agricultural industry.
The farm equipment maker lifted its outlook on Friday and expects equipment sales to rise 4% this year. It had previously projected a decrease of 1%. "We are seeing signs that after several years of steep declines key agricultural markets may be stabilizing," said CEO Samuel Allen in prepared remarks.
Shares, which have climbed 41% in the last twelve months, jumped 3% to $112.55 in pre-market trading.
Deere has struggled in light of a farming downturn that has weakened demand for its equipment. Farmers, squeezed by the falling price of commodities like corn and soybeans, have kept a tighter grip on their wallets.
The company still reported declining profits and sales during its latest quarter, but the results beat expectations. "John Deere has started out the year on a positive note in the continued face of soft market conditions," said Allen.
Overall, first quarter profits fell to $193.8 million, or 61 cents per share, compared with $254.4 million, or 80 cents per share, a year earlier. That topped analyst estimates of 54 cents per share.
Revenue slipped 1.5% to $4.70 billion, beating analyst estimates of $4.67 billion. Equipment sales declined 1%, dragged down by an 8% decrease in the U.S. and Canada and partially offset by an 11% rise in the rest of the world.
