MOLINE, Ill. - Deere & Co. announced today it set quarterly records for net income and net sales and revenue in the second quarter of the current fiscal year.

The Moline, Ill.-based company reported a net income of $763.5 million, or $1.74 per share, for the second quarter ended April 30. Worldwide net sales and revenue for the second quarter increased 18 percent over the prior year to $8.097 billion.

Earnings per share increased 28 percent over the prior year figure of $1.36, and net sales and revenue leaped 18 percent from the previous year total of $7.469 billion in 2007. Year-to-date net income for the current fiscal year was reported at $1.133 billion, or $2.56 per share, compared to $862.3 million, or $1.88 per share, last year.

Agricultural equipment net sales were up 34 percent in the second quarter, from $3.50 billion in 2007 to $4.70 billion in 2008.

"The Waterloo plant is a big part of that agricultural division, which is doing well globally," said company spokesman Ken Golden.

Golden cited fundamental changes in the eating habits of people in Asia as having contributed to Deere's increased global sales. According to Golden, an increase in the demand for grain in countries such as India and China has led to an increase in demand for capital investment in farming equipment. Deere has benefitted from this phenomenon as evidenced by its 46 percent increase in sales outside the U.S. and Canada.

"A lot of people say this (increase in demand) is due to bio-fuels, but that is secondary," said Golden.

Currency translation may have also played a role in Deere's strong global sales, but Golden insisted a weak dollar did not contribute to "a big portion" of the increase in sales.

The demand for tractors is so strong, in fact, that obtaining one in the coming months could prove difficult.

"We are pretty far out as far as selling tractors," said Golden. "That is one of the reasons we recently announced increases to our tractor production capacity. We are pretty sure a fundamental change has taken place with respect to worldwide demand (for agricultural equipment)."

The only component of Deere's operations that experienced a decrease in second quarter sales was in construction and forestry net sales, which dipped by $115 million from the previous year.

The company is projecting a record-breaking year, with net income expected to reach $2.2 billion by the end of Deere's fiscal year in October. Equipment sales are expected to increase by about 20 percent for both the full year and the third quarter of 2008. Net income in the third quarter is expected to come in between $550 million and $575 million.

"We believe John Deere is in a prime position to achieve further growth, generate strong levels of cash flow, and deliver solid investor value well into the future." Deere CEO Robert Lane said in a press release this morning.

Reuters estimates were dead-on with respect to Deere's second-quarter earnings. According to the estimates, analysts were expecting the $1.72 earnings per share Deere reported this morning. Deere shares rose $0.82, or about 0.92 percent, to $90.19 Tuesday in advance of today's earnings release, but dropped about 7 percent in premarket trading this morning.

Contact Drew Andersen at (319) 291-1418 or drew.andersen@wcfcourier.com.