Deere is raking in big profits. The world’s largest farm equipment maker reported Friday that it doubled its bottom line in the latest quarter, crushing analysts’ estimates.
Its equipment sales jumped by a third. It’s benefiting from the need to replace aging fleets and the run-up in commodity prices, which enrich farmers who are then able to order more equipment. That’s driving up demand for its famous green tractors and combines.
Deere is also bullish about the road ahead. It raised its earnings forecast for the third time in seven months.
That full-year estimate assumes it’ll raise prices on large farm machines by 8%. Deere is able to hike prices to offset its soaring costs because the disruption of the supply chain amid the health crisis has caused supplies to lag demand. Deere and other tractor makers are booking orders for delivery in 2022.
That optimistic outlook initially drove up Deere’s shares at the market open before they turned south.