Ending a string of 12 consecutive quarterly decreases in earnings, Deere & Co. reported better-than-expected earnings Friday — sending its stock price into record territory.

The Moline-based equipment maker said net income rose 62 percent to $802.4 million, or $2.49 per share, for the quarter ended April 30. That compared with net income of $495.4 million, or $1.56 per share, for the period ended May 1, 2016.

Deere also raised its full-year earnings forecast significantly, to $2 billion from $1.5 billion it had forecast in the first quarter. In addition, Deere now expects sales of its agricultural and construction equipment to increase 9 percent in 2017, up from its forecast of 4 percent a quarter ago. 

The results topped analysts on Wall Street's estimate of $1.70 per share and sent Deere's stockup in trading Friday. It closed up $8.23 at $120.90. At one point, it hit a record $122.24.

"John Deere reported strong results in the second quarter as market conditions showed signs of further stabilization," Deere chairman and CEO Samuel Allen said in a news release. "We are seeing modestly higher overall demand for our products, with farm machinery sales in South America experiencing a strong recovery."

The first quarter of 2014 was the last time Deere outperformed the same quarter of the previous year, said company spokesman Ken Golden. 

According to Golden, Deere entered the year forecasting full-year earnings of $1.4 billion. The forecast of $2 billion earnings would make 2017 one of the company's top five earnings years, he said.

Deere's all-time record for earnings was $3.5 billion in 2013. It had $1.52 billion in net income in 2016.

Deere also reported results for the first six months of the fiscal year. Net income was $996.2 million, or $3.10 per share, for the first six months. That's up from $749.8 million, or $2.36 per share, for the same period last year.  

"What we're seeing in ag compared to last year is sales are improving in all our main geographies, including large ag (equipment) in north America," Golden said.

While Deere still is forecasting the ag industry to be down 5 percent in North America for the year, he said that is improved from its previous forecast of down 5-10 percent.

Deere's worldwide sales of ag and turf equipment are expected to increase 8 percent for the year, which is up from its previous forecast of 3 percent, Golden said.

After a few years of weak conditions, all of Deere's markets now are seeing signs of stabilization.

Deere's construction and forestry sales increased 7 percent in the quarter and 1 percent for the first six months. Increased home construction helped to drive the improvement.

"Buyers of our equipment are becoming more confident in being able to reinvest in their business by buying new equipment," Golden said.

In the second quarter, Deere's worldwide net sales and revenues increased 5 percent to $8.287 billion and 4 percent to $13.912 billion for the first six months.

Allen said Deere's performance "reflects the sound execution of our operating plans, the strength of a broad product portfolio, and the impact of our actions to develop a more agile cost structure."

In a conference call with analysts Friday, Raj Kalathur, the company's chief financial officer and senior vice president, said Deere continues to move forward with its plans to cut $500 million in structural costs by 2018.

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"We are still executing a business model that is important for the long-term good of the company," Golden said. "Structural costs reductions is something Deere feels is very important for the long-term profitability."

He said structural costs are those that lower the cost of doing business such as lower materials costs, improved operating costs and fewer employees.

Late last year, Deere offered a voluntary separation program to employees. The company has not indicated how many employees accepted it, but has said the total pretax expenses related to the program are estimated at $111 million.

During the business downturn of the past three years, Deere also placed nearly 2,500 production workers on indefinite layoff across its Midwest plants. Golden said the company still has approximately 850 production employees on layoff, including about 350 at its Illinois Quad City plants: Seeding and Cylinder in Moline and Harvester Works in East Moline.

Deere officials told analysts that the company now will produce at retail demand as opposed to below demand as it did last year.

"We'll continue to match our manufacturing workforce to the size of the market demand for each product," Golden said. "If we're selling more tractors, it could mean a need for more people."

Company equipment sales are projected to increase about 9 percent for fiscal 2017 and rise about 18 percent for the third quarter compared with the same period of 2016.

"Deere is demonstrating a continuing ability to produce impressive results through all phases of the business cycle," Allen said. "This resilience illustrates our success driving improved operating efficiencies and developing a wider range of revenue sources."

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