Deere and Co. saw its earnings soar by 75% in the latest quarter, driven by strong demand for combines and other large farm machinery, and the company sees continued strong performance over the next year.
Deere on Friday reported $2.2 billion in net income for the fourth quarter of fiscal 2022, which ended Sept. 30. The company reported $7.44 in earnings per share in the quarter, an 81% increase from the same quarter the year before.
Operating profit on Deere's production and precision ag segment jumped 124% to top $1.7 billion in the latest quarter over the same quarter in FY21.
Deere’s net income totaled $7.1 billion for fiscal 2022, a 20% increase over FY21. The company estimated its FY23 earnings at $8 billion to $8.5 billion, based on continued strong growth in U.S. and Canadian agriculture. The company expects sales growth of 15% to 20% in its production and precision agriculture segment in FY23.
Brent Norwood, head of investor relations for Deere, told analysts the company’s order books are full into the third quarter of FY23 and that retail inventories of both new and used equipment continue to be tight.
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“Stocks to use ratios for key grains still remain very, very low, while exports from the Black Sea region are expected to be down about 40%. It’s going to take a couple of growing seasons to ease the tight supply and this will support commodity prices in the interim,” he said.
“While crop prices may have come down a little bit since the summer, they remain at levels where our customers still have healthy profits despite the higher input costs they are facing.”
Deere expects 10% higher sales in its construction and forestry business in FY23.
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