Deere Reverses 4Q Loss As Farm Conditions Improve

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MOLINE, Ill. (AP) — Deere & Co., the world's largest maker of agricultural equipment, reversed a loss in its fiscal fourth quarter as it reported improved conditions on U.S. farms but continued weakness in construction equipment sales.

The Moline, Ill., company said Wednesday it made $457.2 million, or $1.07 per share, for the quarter, compared with a loss of $222.8 million, or 53 cents per share, in the same period last year.

The company also predicted increased net income and earnings for its 2011 fiscal year.

Revenue for the quarter was up 35 percent from the year-ago period to $7.2 billion, due largely to stronger equipment sales, especially in the U.S. and Canada. However, the increase was partially offset by higher raw material costs.

Deere beat Wall Street's estimates for the quarter. Analysts polled by Thomson Reuters expected earnings of 95 cents per share on revenue of $6.2 billion.

For the full year, the company famous for its green-and-yellow machinery made $1.865 billion, or $4.35 per share, up 114 percent from last year's 873.5 million, or $2.06 per share. Last year's fourth quarter featured weak sales and one-time charges from restructuring expenses and a write-down in the value of assets.

CEO Samuel Allen said in a statement that conditions continued to be positive in the U.S. farm sector, including increased sales of larger equipment, but European agricultural markets remained soft.

"Deere's construction equipment sales benefited from somewhat-stronger overall demand but remained far below normal levels," he said in the statement.

The company predicted that equipment sales would rise 10 to 12 percent in the new fiscal year, including a 34 percent increase in the first quarter. The increase is due in part to what Deere said would be a record year for the introduction of new models because of stricter pollution control regulations worldwide.

The company expects net income of about $2.1 billion for the full year, with the sales rise partially offset by the cost of transitioning to the new models and increased costs to comply with the emissions regulations. The company also predicts higher raw material costs in 2011.

Copyright 2010 The Associated Press.



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