What happened
Shares of Deere & Company (DE 0.98%) climbed on Wednesday after the farming and construction equipment maker announced strong growth in sales and profits. As of 3:30 p.m. ET, Deere's stock price was up more than 5%.
So what
Deere's revenue surged 37% year over year to $15.5 billion in its fiscal 2022 fourth quarter, which ended on Oct. 30.
The heavy equipment manufacturer enjoyed broad-based gains across its major business lines. Net sales in its production and precision agriculture, small agriculture and turf, and construction and forestry divisions rose 59%, 26%, and 20%, respectively.
Higher crop prices are enabling farmers to invest in new tractors and other machinery. At the same time, government incentives are helping to spur spending on infrastructure projects.
Additionally, CEO John May said Deere's results reflect the company's "extraordinary efforts to overcome supply chain constraints, increase factory production, and deliver products to our customers."
These sales gains also drove a sharp increase in profits. Deere's net income soared 75% to $2.2 billion. And its earnings per share, which were boosted by stock buybacks, increased over 80% to $7.44.
Now what
Deere sees further growth ahead. Management expects the company's net income to rise to as much as $8.5 billion in fiscal 2023, up from $7.1 billion in 2022.
"Deere is looking forward to another strong year in 2023 based on positive farm fundamentals and fleet dynamics as well as an increased investment in infrastructure," May said in a statement. "These factors are expected to support healthy demand for our equipment."
