(Reuters) -Deere & Co raised its 2022 profit forecast on Friday as gaps in grain supplies triggered by Russia’s invasion of Ukraine drive global crop price higher, but the heavy equipment maker’s stock fell after its quarterly revenue missed analysts’ forecasts.
The Moline, Illinois-based firm forecast fiscal 2022 net income, including special items, of $7.0 billion to $7.4 billion, from a prior estimate of $6.7 billion to $7.1 billion.
Deere’s net income was $2.09 billion or $6.81 per share for the quarter ended May 1, outpacing Wall Street estimates of $6.71 per share.
Shares in the world’s largest farm equipment maker, which surged to record highs in March as investors bet on stronger demand, were down 6% in pre-market trading against the backdrop of a weaker market triggered by a lackluster earnings season and a hawkish stance from the U.S. Federal reserve.
The S&P is down nearly 19% year-to-date.
Deere’s performance has largely outpaced the general market as a tight supply of grains has lifted prices, supporting farm incomes and encouraging farmers to upgrade their fleet.
The company said that total net sales and revenue rose about 11% to $13.37 billion from $12.06 billion in the quarter, while net sales for its production and precision agricultural solutions saw the biggest increase, up 13% from the year before.
Grains giant Archer-Daniels-Midland Co said last month that it expects demand to likely outpace crop supplies until at least 2024.
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