Shares of Deere spiked Friday morning after the agriculture company topped estimates for its fiscal first quarter and said the farming sector in the United States is starting to stabilize.
The company reported $1.63 in adjusted earnings per share and $6.53 billion of revenue for the quarter. Analysts expected $1.25 in earnings per share and $6.409 billion of revenue, according to Refinitiv. The stock closed up 7% and set a new intraday record high during the session.
"John Deere's first-quarter performance reflected early signs of stabilization in the U.S. farm sector," CEO John May said in a statement.
Deere and other major agriculture companies have been hit by the trade war between the U.S. and China, which has made farmers unsure of how large the market for their products will be.
Sales in the company's agriculture and turf segment were down 4% compared with the same quarter last year, but operating profit rose 7% segment. The company said operating profit grew in part due to lower production costs.
The company said it expects net income of between $2.7 billion and $3.1 billion for the full year. It did not change its guidance for agriculture and turf equipment sales, which includes a 5% decline in the United States and Canada.
Friday's sharp increase represents a turnaround for the stock, which had been down more than 4% so far this year.
Deere suffered sales and profit declines in its construction and forestry segment for the quarter, and the company said it expects those to be down 10 to 15% for the year.