Salem Radio Network News Thursday, February 22, 2024

Business

Deere raises annual profit outlook on strong demand for large tractors

By Bianca Flowers and Shivansh Tiwary

(Reuters) – Deere & Co raised its annual profit forecast on Friday as demand for large farm tractors remains robust, while easing supply chain bottlenecks lower manufacturing costs.

The Moline, Illinois-based company has also seen high demand for its construction equipment, as the United States upgrades roads, railways and other transportation infrastructure under the Joe Biden administration’s $1 trillion package approved by the Senate in 2021.

Deere, a barometer for the global economy, has maintained resilient operating profit margins, despite global market volatility. Farmers’ demand for new equipment and parts to repair aging machinery has bolstered the company’s sales. Executives have reiterated that order books are still robust heading into next year.

“Fundamentals are expected to continue fueling solid demand for our equipment, supported by a strong advance-order position,” the company’s chief executive, John May, said in a statement.

The world’s largest farm equipment maker expects 2023 net income between $9.75 billion and $10.00 billion, compared with its previous outlook of $9.25 billion to $9.50 billion.

Deere has leveraged price increases across its equipment lines to counter higher material and logistics costs. With supply-chain bottlenecks clearing up, the industrial giant boosted output capacity to reduce its production backlog.

Net income rose to $2.98 billion, or $10.20 per share, for the quarter through July, from $1.88 billion, or $6.16 per share, a year earlier.

Total net sales and revenue rose 12% to $15.80 billion.

(Reporting by Shivansh Tiwary in Bengaluru; Editing by Vinay Dwivedi)

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