Deere & Co
The company on Wednesday also raised its outlook for fiscal 2010 machinery sales growth to a range of 6 percent to 8 percent, from a previous estimate that sales would fall 1 percent.
Profitability in the unit that makes Deere's green tractors and harvesters was especially impressive, reporting margins of nearly 10 percent -- three times what investors had expected, according to Eli Lustgarten, an analyst at Longbow Securities.
It looks like brilliant profitability in ag in a relatively weak market, Lustgarten said. It's a combination of restructuring, it's a combination of operating efficiency, it's execution, and brilliant ag margins.
Deere, the world's largest maker of agricultural equipment, reported a fiscal first-quarter net profit of $243.2 million, or 57 cents a share, up from $203.9 million, or 48 cents a share, a year earlier.
Revenue fell 6 percent to $4.84 billion.
Analysts, on average, expected the Moline, Illinois-based Deere to earn 19 cents a share on sales of $4.12 billion, according to Thomson Reuters I/B/E/S.
Net income at the company's financial services arm nearly doubled to $85.1 million, from $46.8 million last year, as the spread between Deere's borrowing costs and the interest it charges customers widened.
Deere shares rose $4.39 to $58.17 in premarket trading.
Deere said commodity prices -- and farm income -- would remain healthy in 2010, supporting industry sales of farm equipment in the United States and Canada at levels comparable to those seen in 2009, but lifting sales in South America by as much as 15 percent.
It warned, however, that industry sales in Europe, especially Central Europe and the former Soviet Union would remain under pressure as a result of challenging economic conditions and low levels of available credit.
Deere, which also makes construction and forestry equipment, said it expected that business to remain deeply depressed for the year as a result of a decline in non-residential construction and relatively high used-equipment levels.
(Reporting by James B. Kelleher; Editing by John Wallace and Maureen Bavdek)