By Dhirendra Tripathi
Investing.com – Deere stock (NYSE:DE) rose 3% in premarket trading Wednesday as the company rode price hikes and strong demand for its farm equipment to leave behind estimates for its fourth-quarter net profit.
Rising prices of crops, namely corn and soybeans, led farmers to invest in more heavy equipment from the company, boosting sales by 19% to $10.3 billion.
According to Reuters, the company increased prices by 8% for its large and medium equipment orders to offset rising inflation, expanding its margin across its divisions, namely production and precision agriculture, small agriculture and turf and construction and forestry.
The manufacturer of tractors and mowers said sales of its large and some medium equipment jumped 23% in the quarter, while sales of smaller farm and turf equipment rose 17%. Net income rose about 70% to $1.28 billion.
The company earlier this month agreed to a new compensation deal with its workers belonging to the United Auto Workers union, ending a nearly six-week-long strike. While that may pump up costs in the coming year, it hasn't stopped the company forecasting another significant increase in revenue and profit.
Deere is forecasting net income of between $6.5 and $7 billion in the financial year just started, a rise of between 9% and 17%.