North Dakota-based Titan Machinery (TITN -0.20%) released quarterly earnings today, and the results substantiated what Deere & Company (DE 0.64%) reported to investors last week. Shares of agriculture equipment dealer Titan soared on the results, closing Thursday's session 24% higher.
Titan reported 20% growth in revenue for its fiscal first quarter ended April 30, 2021. But net income exploded by more than 350% versus last year. That supports what Deere also reported in the sector last week. Deere said sales in its fiscal quarter ended May 2, 2021 increased 34%, resulting in net income growing 169% compared to its year-ago period.
Rising commodity prices have been driving a surge in farming equipment. In its earnings call, Deere said it sees growth in agriculture across every global geographic area for fiscal 2021. The much-smaller Titan sells and rents the competing Case and New Holland brands in its dealer network that operates in nine U.S. states as well as five European locations.
Shares of both companies had almost equally benefited from the boon in the sector before investors piled into Titan shares in today's trading session.
Titan chairman and CEO David Meyer echoed Deere's outlook, saying in a statement: "The renewed strength across the agriculture complex, following an improved commodity outlook, is having a positive impact on all our businesses." He noted a shift in the business environment, adding the company is seeing "some of the pent-up demand come back after several years of more conservative posturing." Investors in Deere and other names in the sector should also be happy to hear that.