After eight consecutive quarters of record earnings, the world's largest agriculture equipment maker, Deere (NYSE: DE), has once again plowed over Street estimates, making its target of record net income for the year look quite attainable.

Corn and Deere -- a match made in heaven
After record first and second quarters, fluctuations in key crop prices might be the only possible speed bumps for Deere. But after remaining subdued for some months, corn prices have actually bounced back since the beginning of May, and corn traders have become increasingly bullish on the commodity. And with the world's biggest corn consumer, China, importing the crop like never before, a drop in corn prices might not be as bad as some think.

Above all, an 11% rise in Deere's first-quarter agriculture and turf equipment sales despite lower crop prices proves that it is capable of tiding over day-to-day fluctuations in crop prices. The tractor king is expecting agriculture equipment sales to rise 15% this year, which isn't bad at all. Peer CNH Global (NYSE: CNH) has, in comparison, projected a relatively muted 5% rise in demand for its agriculture equipment this year, while AGCO (NYSE: AGCO) expects a double-digit rise in its full-year net sales.

What should propel Deere forward is its lineup of advanced agriculture equipment launched last year. Pegged as the most innovative products in the company's history, the line's contribution should be reflected in numbers throughout the year. Deere continues to aim higher, though. It has planned seven new factories across the globe this year, including three that will cater to rising construction equipment demand -- an area the company is keeping a close eye on.

Getting it right
Although construction equipment (along with forestry equipment) accounts for less than a quarter of Deere's top line, it is adding great value to the company. Sales in the division surged 26% from the year-ago period. Peers had already given us enough evidence of the uptick in construction activity, particularly in the U.S., even before Deere released its numbers. Sales in Caterpillar's (NYSE: CAT) largest division, construction industries, rose 13% in its first quarter, thanks to a robust North American market. Manitowoc's (NYSE: MTW) crane division sales climbed 29% from the year-ago period in its last quarter, with backlog value touching a new high since the financial crisis.

Given its projection of a 20% rise in full-year construction equipment sales, the fact that Deere is paying special attention to this division isn't surprising. All three factories will come up in the emerging hot spots for construction companies -- Brazil and China. These investments seem spot-on, as even Caterpillar and Manitowoc are working hard to grab a bigger share of these markets.

The Foolish bottom line
Common sense tells me that if crop prices were indeed such a big worry, Deere wouldn't have raised its full-year net income outlook to $3.35 billion from $3.28 billion earlier. Deere has always maintained a conservative stance toward its earnings guidance.

Superb performance, strong financials, great dividend growth -- Deere is a complete package. The 13% dip in its share price over the past three months suggests that this could be a wonderful opportunity for those looking for a stock to add to their portfolio for the long haul. This stalwart's definitely worth tracking. Click here to add Deere to your stock watchlist.

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