The Moline, IL-based company reported Q4 net income of $0.90 per share, which was a massive $0.51 better than the $0.39 that analysts had expected. Revenues fell 4.8% from last year to $5.65 billion, also beating Wall Street’s $5.36 billion estimate.
Deere noted that a global farm recession and weak construction equipment markets were the culprits behind its fourth quarter and full year sales declines.
Looking ahead, DE forecast a 1% decrease in net sales and revenues for fiscal 2017, while net income (profits) are expected to come in around $1.4 billion.
Meanwhile, company equipment sales are projected to decline about 1% for fiscal 2017, and to fall around 4% for Q1. Analysts were expecting a worse first quarter decline of 5.4%.
Global agriculture and turf equipment sales are seen falling 1% in 2017 as well, with industry sales of agricultural equipment in the U.S. and Canada falling 5% to 10%.
The company provided some very optimistic commentary via press release:
“Our forecast continues to represent a standard of performance that is considerably higher than in earlier downturn…This illustrates our ongoing success developing a more durable business model and a wider range of revenue sources. At the same time, we are driving further efficiency gains and have confidence we can deliver structural cost reductions of at least $500 million by the end of 2018.”
Deere shares rose $9.99 (+10.86%) to $102.00 in premarket trading Wednesday. Prior to today’s report, DE had already gained 20.64% year-to-date, more than doubling the performance of the benchmark S&P 500 during the same period.