Deere & Co reported a 46 percent rise in quarterly earnings and projected "substantial growth'' for 2012 amid strong global farming conditions, sending its shares higher in premarket trading.
``Farmers in the world's major markets are continuing to experience favorable incomes due to strong demand for agricultural commodities,'' the world's largest maker of farm machinery said in a press release.
New product launches also boosted its quarterly results, the company said.
Moline, Illinois-based Deere posted net income of $669 million, or $1.62 per share, for the fiscal fourth quarter that ended Oct. 31, compared with $457 million, or $1.07 per share, a year earlier. Revenue rose 20 percent to $8.61 billion due to strong equipment sales.
Wall Street analysts had expected Deere to earn $1.43 a share, according to Thomson Reuters I/B/E/S.
Deere said its full-year net income of $2.8 billion represents a record for the company, and it expects substantial growth in 2012. It is projecting $3.2 billion in net income in the fiscal year that began Nov. 1 on a 15 percent increase in equipment sales.
``Our success reflects a continued pattern of strong customer response to our innovative lines of equipment coupled with the skillful execution of business plans aimed at expanding our global competitive position,'' Chief Executive Samuel Allen said in a press release. He said Deere remains well positioned to carry out its extensive growth plans and capitalize on positive long-term economic trends.
Deere's strong earnings come during particularly good times for American farmers. Farmland prices surged to their highest level in three decades during the third quarter. The trend has accelerated even as major crop prices have fallen from peaks earlier this year.
Rising values and hefty demand in emerging markets have helped buoy earnings for other farm equipment makers recently.
Last month, Deere rival Agco Corp posted stronger-than-expected third-quarter results and raised its full-year outlook for the fourth time. CNH Global, which also outpaced analysts' forecasts, said full-year revenue growth would be at the upper end of its prior forecast of 15 percent to 20 percent.
Deere's shares were up nearly 5 percent in premarket trading.
The company said sales outside the United States and Canada rose 31 percent in the latest quarter. Agricultural and turf equipment sales rose 18 percent and are expected to rise 15 percent in 2012. Construction and forestry machinery sales increased 34 percent during the quarter and are expected to increase 16 percent in 2012. (Reporting by John D. Stoll in Detroit, editing by Maureen Bavdek and John Wallace)