Deere raised its full-year profit forecast amid strong demand for farm equipment and the easing of supply chain woes that have dogged companies since the pandemic.
The U.S. tractor -maker lifted its outlook as it reported second-quarter profit that beat analyst estimates on Friday, citing healthy demand for farm and construction equipment and an improved operating environment.
The company now expects earnings of $9.25 billion to $9.5 billion for the fiscal year that ends Oct. 31.
Shares rose 4.5% at 9:32 a.m. in New York, the biggest intraday increase since mid-February.
Moline, Illinois-based Deere is a bellwether for the health of the agricultural industry given its position as the world’s largest producer of farm machinery.
Surging prices for corn, wheat and soybeans over the past two to three years have boosted agricultural incomes and helped farmers replace aging equipment, from tractors to combines.
The company has also been able to partially offset recent supply chain pressures with price hikes.
“Deere continues to benefit from favorable market conditions and an improving operating environment,” Chief Executive Officer John May said in a statement. “Though supply-chain constraints continue to present a challenge, we are seeing further improvement.”
The company’s full-year profit forecast compares with February’s view of $8.75 billion to $9.25 billion.