Bob Tita and Allison Prang reported on Friday at The Wall Street Journal Online that, “Deere & Co. is raising equipment prices this year to protect profit as costs rise.
“The maker of farm and construction machinery said on Friday that profit was up 50% and equipment sales up 34% annually in its latest quarter, though both figures disappointed analysts. Deere’s shares rose 5.8% to close at $155.25, as investors appeared to focus on Deere’s strong outlook for sales growth this year, analysts said.
“Rising expenses in recent quarters have weighed on Deere’s performance even as machinery demand picks up. Deere said Friday that it was still paying more for freight and materials.”
The Journal writers indicated that, “Deere joined a host of U.S. manufacturers reporting rising expenses as a growing U.S. economy drives up prices for materials and shipping. Prices for steel and aluminum have been pushed up by U.S. tariffs on imported metal.
“Deere executives said they had to pay more to get their shipments made early this year, pushing up transport costs. They said they would raise prices to reflect that and higher steel expenses as Deere begins taking orders on 2019 models later this year.”
