John Deere sails past profit expectations

Deere & Co. posted stronger profit than Wall Street had anticipated during its most recent quarter and raised its full-year forecast, sending the company's stock up 5% in early trading Friday.

Deere shares (DE) rose to $80.80 after the company projected fiscal-year net income of $1.35 billion, up from a previous forecast of $1.2 billion.

The improved forecast came despite what the Moline, Ill.-based equipment manufacturer described as a challenging global economic picture, including a bumpy road in the crucial agricultural and construction sectors.

In fact, the John Deere equipment manufacturer lowered its full-year revenue forecast from a decline of 9% to a decline of 10%.

But investors were focused on the bottom line. Earnings per share of $1.55 for the quarter ended July 31 sailed past S&P Global Market Intelligence expectations of 93 cents.

Net income fell 4.5% to $489 million for the quarter, while revenue declined 11.5% to $6.7 billion.

The company said it had squeezed more costs out of its production and sales processes, lowered administrative expenses and performed better on price, despite declines in sales to agricultural customers and forestry and construction buyers.

"This underscores the success of our efforts to develop a more durable business model and a wider range of revenue sources," Deere CEO Samuel Allen said in a statement.

"At the same time, we are continuing to focus on ways to make our operations more efficient and achieve further structural cost reductions. We remain confident in the company’s present direction and firmly believe Deere is on the right track to deliver significant value to its customers and investors in the years ahead.”

Follow USA TODAY reporter Nathan Bomey on Twitter @NathanBomey.