Deere & Co. reported record net income for the second quarter Wednesday and predicted strong 2013 results, even as it lowered its expectations for sales growth for the year.
The company said it had net income of nearly $1.1 billion for the quarter ending April 30, or $2.76 a share. That's up from $2.61 per share in the same quarter a year ago. The results surpassed analysts' expectations, which were $2.71 per share.
Worldwide net sales and revenue jumped 9 percent to $10.9 billion over the comparable period a year ago, the company said.
"After a record-setting second quarter, John Deere is well on its way to another year of strong performance," Deere chairman and chief executive officer Sam Allen said in a news release.
"Deere's results are a reflection of positive conditions in the global farm economy, which continues to show impressive strength. The company's performance also offers further proof of the adept execution of our operating and marketing plans, which are aimed at expanding our global market presence."
The company continued to say it expects net income to hit $3.3 billion for 2013, no change from the previous forecast.
It did, however, lower its forecast for net sales for 2013, projecting 5 percent growth over 2012, down from the previous forecast of a 6 percent increase.
Allen said lingering economic concerns in many parts of the world and adverse weather patterns are tempering its outlook. He noted cool, wet weather in North America has delayed crop planting, slowed construction activity and hurt sales of turf-care equipment.
Still, the company said it continues to be confident of its longer-term growth prospects, noting its investment in new products and additional capacity.
As for its specific divisions, its worldwide agriculture and turf unit saw an increase in net sales of 12 percent, to $8.7 billion, for the quarter, when compared with the same period a year ago. Operating profit for the division was up 13 percent to nearly $1.6 billion. For the 2013 fiscal year, it projected net sales would be up 7 percent, up a point from its previous forecast.
It noted strong farm income and high commodity prices.
In its construction and forestry division, net sales were down 6 percent to $1.57 billion in the second quarter of 2013 from $1.67 billion in the same period a year ago. Operating profit was down 32 percent during the quarter, to $81 million from $119 million in the same quarter a year ago.
The decline in operating profit was primarily because of lower shipment volumes, increases in production costs and higher selling, administrative and general expenses, the company said.
The company predicted net sales in the division would be down 5 percent for the year. It's previous forecast had predicted a 3 percent increase. The company said its forecast reflects a cautious outlook for U.S. economic growth, weather conditions in North America and flat sales in the world forestry markets.
In financial services, the company reported net income of $125 million for the quarter, up from $109 million for the same quarter a year ago.