Construction equipment manufacturer Deere (NYSE:DE) reversed course from the prior year to post a fourth quarter profit, owing to positive U.S. farming conditions, it said Wednesday.
For the fourth quarter ending October 31, net income attributable to Deere & Company was $457.2 million, or $1.07 per share, reversing the net loss of $222.8 million, or 53 cents per share, for the same period last year. Fourth quarter sales increased 35% to $7.2 billion.
The results trumped analyst estimates of profits of 94 cents per share on revenues of $6.2 billion.
Fourth quarter sales for the agriculture and turf segment improved 33% to $5.4 billion, while revenues from the construction and forestry division grew 75% to $1.2 billion.
"Although conditions continued to be positive in the U.S. farm sector, and included a highly favorable sales mix of larger equipment, European agricultural markets remained soft," said CEO Samuel R. Allen.
After making gains this morning, the company's stock slid 0.2% to trade at $76.22 as of 1:03 pm EST, as a result of Deere's lower-than-expected fiscal 2011 profit forecast.
The company said it expects fiscal 2011 full-year profits of $2.1 billion, lower than analyst forecasts of $2.42 billion, according to Thomson Reuters.
This is because of higher expected product costs to comply with regulations, as well as greater raw material costs in 2011.
For fiscal 2010, net income attributable to Deere & Company was $1.9 billion, or $4.35 per share, compared with $873.5 million, or $2.06 per share, last year. Sales for the whole year increased by 13% to $26 billion.
Allen added that construction equipment sales benefited from somewhat-stronger overall demand, but remained far below normal levels.