ETFs To Buy As John Deere Reports Solid Q2

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Before the opening bell on May 21, the world’s largest agricultural equipment maker under the iconic John Deere brand, Deere & Co DE reported better-than-expected second-quarter fiscal 2021 results, beating estimates on both the top and bottom lines. In addition, the company lifted its fiscal year outlook on a recovering global economy, which boosted demand for farm machine and construction equipment.

Earnings per share came in at $5.68, well above the Zacks Consensus Estimate of $4.44 and surged 169.2% from year-ago earnings. Revenues increased 30% year over year to $12.06 billion and beat the Zacks Consensus Estimate of $10.38 billion. Robust results were fueled by improving conditions in the farm and construction sectors.

Deere expects industry sales of large agricultural equipment in the United States and Canada — the company's biggest combined market — to grow by 25% this year compared with the previous forecast of 15-20% growth as the global economy recovers from the COVID-19 pandemic. However, the farm equipment giant also sees increased supply-chain pressures through the balance of the year. Despite these challenges, the company is on track for a strong year (read: Why Agricultural Commodity ETFs Are Soaring This Year).

For fiscal 2020, the company raised its net income forecast to $5.3-$5.7 billion from the previous projection of $4.6-$5 billion. Construction and forestry sales are expected to grow 25-30% and the small agriculture and turf equipment sales will grow 20-25%.

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