Northern, WI 5/16/12 (StreetBeat) -- Deere (NYSE: DE) posted a 17 percent spike in profits for the second quarter Wednesday and boosted its outlook for the year, predicting record-high global demand for farm equipment.The company beat Wall Street expectations on net income and revenue, posting a profit of $1.06 billion, or $2.61 per share, up from $904 million, or $2.12 per share, in the same quarter last year.
Revenue jumped 12 percent to $10 billion, from $8.9 billion, as global net equipment sales increased 13 percent to $9.41 billion.
"Our results are a reflection of positive conditions in the global farm economy, which is continuing to show impressive strength and endurance," Samuel Allen, the company's chairman and chief executive, said in a statement.
Last week, the U.S. Agriculture Department predicted this year's corn production will hit a record 14.8 billion bushels. And corn exports between September and August 2013 are expected to hit 1.9 billion bushels, with demand rising from China.
China became the top market for U.S. agricultural goods last year, purchasing $20 billion in U.S. agricultural exports.
And the unprecedented crop production is showing up in Deere's numbers.
Equipment sales in the U.S. and Canada rose 18 percent, while overseas sales increased 6 percent.
Global sales of agricultural and turf equipment rose 11 percent to $7.74 billion, and construction and forestry equipment sales jumped 26 percent to $1.67 billion. Deere said both businesses got a boost from higher shipment volumes and pricing improvements.
The strong earnings arrive even as unfavorable exchange rates reduced international sales growth by four percentage points.
Financial services revenue rose 3.9 percent to $109.2 million, as the company's credit portfolio improved.
Deere & Co., based in Moline, Ill., said that it still expects equipment sales to increase about 15 percent this year and raised its full-year profit prediction to about $3.35 billion. Deere previously predicted a profit of $3.28 billion.
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