Deere & Company (NYSE:DE) reported a Q2 profit that increased 62% over last year’s comparable period on revenue that was up 2.1%. DE stock was trading up more than 6% in this morning’s pre-market activity.
The farm and construction equipment manufacturer said its bottom line climbed to $802.4 million, or $2.49 per share. This was higher than $495.4 million, or $1.56 per share, in last year’s second quarter. Analysts had expected the company to earn $1.68 a share. The company said revenue for the quarter rose to $7.26 billion, up from $7.11 billion last year.
“John Deere reported strong results in the second quarter as market conditions showed signs of further stabilization,” said Samuel R. Allen, chairman and CEO. “We are seeing modestly higher overall demand for our products, with farm machinery sales in South America experiencing a strong recovery.”
DE increased its forecast numbers, with equipment sales now projected to increase about 9% for FY17 and to rise about 18% for Q3 compared with the same periods of 2016.
Despite weak global agricultural sectors, Deere continues to perform well, driven by ongoing success of developing a more durable business model and a wider range of revenue sources. The company will gain from the implementation of operating plans and disciplined cost management as well as the impact of a broad product portfolio.
Earlier this week, Zacks Investment Research posited that DE stock is undervalued, with a trailing 12-month price/earnings ratio of 24.39 below the analysts’ categorized sub industry’s average trailing 12-month P/E ratio of 25.52.
DE stock has been performing well of late, up more than 9% this year. Others in the sector including AGCO Corporation (NYSE:AGCO), up 6.7%, Caterpillar, Inc. (NYSE:CAT), up 8.1%, and Rockwell Automation (NYSE:ROK), up 14.8% in the same time period.