Aug. 14 (Bloomberg) -- Deere & Co., the world’s largest farm-equipment maker, raised its full-year earnings forecast and reported quarterly profit that topped analysts’ estimates as Brazilian farmers bought more tractors.
Net income for the three months through July rose to $996.5 million, or $2.56 a share, from $788 million, or $1.98, a year ago, the Moline, Illinois-based company said today in a statement. That exceeded the $2.18 average of 19 estimates compiled by Bloomberg. Fiscal third-quarter equipment sales climbed to $9.32 billion from $8.93 billion.
"Deere’s success is a reflection of considerable strength in the farm sector, especially in North and South America," Chairman and Chief Executive Officer Samuel Allen said in the statement.
For the fiscal year through October, net profit will be about $3.45 billion, Deere said today, compared with a May forecast of $3.3 billion. The outlook for equipment sales is unchanged, with Deere seeing a 5 percent gain.
"They have been gaining share in Latin America," Stephen Volkmann, a New York-based analyst for Jefferies & Co. who rates the shares a hold, said in an Aug. 9 interview. "That market has been going gangbusters."
Record soybean production in Brazil is supporting equipment demand, Bloomberg Industries analyst Karen Ubelhart said in an Aug. 8 report. Brazil’s tractor sales have increased 26 percent year-to-date, according to industry group ANFAVEA. In July, tractor sales in the country rose 17 percent from a year earlier while combine sales gained 46 percent, ANFAVEA said.
Deere’s Central and South American equipment sales more than doubled to $3.6 billion in fiscal 2012 from 2007, according to the company. U.S. and Canada made up 64 percent of Deere’s $36.2 billion in sales last year.
Deere rose 0.6 percent to $83.91 yesterday in New York. The shares have declined 2.9 percent this year.
(Deere scheduled a conference call to discuss the earnings report at 10 a.m. New York time, which can be accessed at the company’s website.)
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