MOLINE — Solid sales in construction equipment offset a global agricultural slowdown for Deere, and the company raised its outlook for the year.
Shares rose nearly 4 percent before the opening bell Friday.
Deere’s most profitable business is making tractors and other farming equipment, but with less demand for large farm equipment, it is relying more on its backhoes, excavators and other construction equipment to grow sales.
Sales of farming equipment fell 25 percent from a year ago to $5.77 billion in the second quarter, and Deere expects sales to fall 24 percent for the year. Meanwhile, sales of construction and forestry equipment rose 2 percent to $1.63 billion and it expects them to also rise about 2 percent for the year. Its unit that gives loans to customers to buy Deere equipment also improved, with revenue rising 14 percent to $653 million.
Deere’s said its second-quarter earnings fell 30 percent to $690.5 million, compared with $981 million last year, but better than Wall Street had expected.
The Moline, Illinois, company posted net income of $2.03 per share, which easily beat the per-share earnings of $1.57 that analysts were looking for, according to a survey by Zacks Investment Research.
Revenue fell 18 percent to $8.2 billion in the period, but beat analyst expectations for revenue of $7.6 billion, according to Zacks .
Profit for 2015 is now expected to be around $1.9 billion, the company said, up slightly from the $1.8 billion it had projected earlier this year.
“John Deere expects to be solidly profitable in 2015, with the year ranking among our stronger ones in sales and earnings despite the pullback in the farm sector,” said Chairman and CEO Samuel Allen in a printed statement.
Shares of Deere & Co. rose $3.24 to $92.70 before the opening bell.