Deere & Co to increase machinery prices
On May 18, Deere & Company’s stock was up 6.4 percent at USD 156.24 in early afternoon trading on the New York Stock Exchange, Reuters.com informs.
Shares of Deere & Co soared on Friday after the U.S. tractor maker revised up its full-year earnings estimate on stronger equipment demand and shared its plans to increase prices to offset increased costs.
Deere missed its second-quarter profit estimates amid higher freight and raw-material costs. The company’s sales costs shot up by 35 percent in the quarter from a year ago and it also expects input costs during fiscal 2018 to be higher than its previous estimate.
"Material and freight costs have exceeded our forecast for the year, due largely to inflation in U.S. steel prices and a tight market for logistics," said Chief Financial Officer Raj Kalathur.
In response to those increases, the company said it was carrying out structural cost cuts and price increases.
Deere expects full-year adjusted earnings to be USD 3.1 billion, higher than USD 2.85 billion forecast earlier. Net sales and revenues are expected to jump about 26 percent from the previous year.
It sees a 30 percent annual increase in full-year equipment sales.
Adjusted profit in the quarter ended April 29 came in at USD 3.14 per share, lower than analysts’ average estimate of USD 3.31 per share.