Deere 3Q Profit Up 15%

Deere & Co.’s third-quarter net income jumped 15% and it boosted its outlook for the year
with global demand for its equipment still strong. Deere benefited from favorable exchange
rates and price increases, but most of the improvement was driven by strong sales growth.
Equipment sales grew 49% outside of the U.S. and Canada. Sales rose 10% within the U.S.
and Canada.

Deere generated $712.3 million in the quarter that ended July 31. That’s up from $617 million
in the same period last year.

Strong equipment sales helped the company’s revenue grow 22% to $8.4 billion in the
quarter, up from last year’s $6.84 billion. Deere said its costs increased 23% to $7.29 billion
in the quarter from last year’s $5.92 billion.

Credit Suisse analyst Jamie Cook said the Japanese tsunami proved to be a much smaller
drag on earnings than expected. Earlier this year, Deere had predicted the Japanese disaster
would hurt sales by $300 million, but the company said the actual impact was about $70
million.

Deere says its 2011 equipment sales should grow 25% over 2010 to $29.47 billion. That’s up
from a previous forecast for 20% growth. Analysts were expecting 2011 sales of $29.05
billion, according to a poll by FactSet. The company also lifted its expectations on net income
slightly, from $2.65 billion, to $2.7 billion. ♦