The Spokesman-Review Newspaper
The Spokesman-Review Newspaper The Spokesman-Review
Spokane, Washington  Est. May 19, 1883
Current Temperature
53°F
Current Conditions
Overcast clouds
View complete weather report
Subscribe now

Roundup: Earnings growing for Deere

A heavy equipment mechanic works on a John Deere bulldozer at Martin Equipment in Springfield, Ill. Deere & Co. reported a 52 percent increase in fourth-quarter earnings Wednesday.Associated Press (FILE Associated Press / The Spokesman-Review)
The Spokesman-Review
A heavy equipment mechanic works on a John Deere bulldozer at Martin Equipment in Springfield, Ill. Deere & Co. reported a 52 percent increase in fourth-quarter earnings Wednesday.Associated Press (FILE Associated Press / The Spokesman-Review)

Agricultural equipment maker Deere & Co. reported a 52 percent increase in fourth-quarter earnings Wednesday on surging demand for tractors and combines worldwide, walloping Wall Street’s expectations.

Deere said the strong agricultural sales enabled it to overcome declines in other sectors because of the U.S. housing slump. The Moline, Ill.-based company also makes construction and forestry equipment such as backhoes, excavators, riding mowers and leaf blowers.

Higher grain prices and rising farm income fueled heavy spending by farmers in the quarter, sending sales of agricultural equipment up 35 percent over a year ago. Increased ethanol production also contributed to the spike.

The world’s largest manufacturer of agricultural machinery, which is known for conservative estimates, said it expects farm sales to continue at a double-digit pace in 2008.

That forecast plus the better-than-expected results pushed its shares up $7.06, or 4.9 percent, to $152.06 Wednesday – double the level of just 15 months ago.

Earnings for the August-through-October period climbed to $422.1 million, or $1.88 per share, from $277.3 million, or $1.20 per share, in the previous year. That easily exceeded the $1.55-per-share consensus estimate of analysts surveyed by Thomson Financial.

“San Francisco-based Gap Inc. said Wednesday its third-quarter profit rose 26 percent as marketing costs fell.

But the company’s cost-cutting campaign couldn’t compensate for a slowdown in sales at its Gap and Old Navy chains. Companywide revenue was flat, and same-store sales — a key measure of retail health — fell 5 percent.

“We feel this is going to be a tough economic environment this upcoming holiday season,” Chairman and chief executive Glenn Murphy said in a conference call.

Its shares sank more than 6 percent Wednesday.

The San Francisco-based company, which named Murphy as CEO during the summer, said net income for the quarter ended Nov. 3 rose to $238 million, or 30 cents per share, from $189 million, or 23 cents per share, in the year-ago period.

Sales were flat at $3.85 billion.

“Abercrombie & Fitch‘s third-quarter profit rose 15 percent as it added more surfer-inspired Hollister stores, despite overall same-store sales that were nearly flat.

The clothing retailer on Wednesday said it earned $118 million, or $1.29 per share, for the quarter ended Nov. 3, compared with profits of $102 million, or $1.11 per share, a year earlier. Sales for the quarter rose 13 percent to $974 million.

Analysts surveyed by Thomson Financial expected earnings of $1.28 per share on revenue of $985 million.

Sales at stores open at least a year were up 1 percent in the quarter.

Higher sales were powered by more Hollister stores. In the past year, Abercrombie has added 59 Hollister locations, bringing the number of surfer-inspired stores to 431 as of the end of October.