Deere & Company (DE – Free Report) reported first-quarter fiscal 2018 (ended Jan 28, 2018) adjusted earnings of $1.31 per share, which surged a whopping 111% year over year. The bottom line surpassed the Zacks Consensus Estimate of $1.16. Deere’s strong results were driven by elevated demand, improvement in agricultural and construction equipment market partly offset by supply chain and logistical delays in shipping products.

Including tax adjustments related to the tax reform, the company reported a loss of $1.66 per share, compared to earnings of 62 cents per share recorded in the year-ago quarter.

Net sales of equipment operations (which comprise Agriculture and Turf, Construction and Forestry) came in at $5.97 billion, rising 27% year over year. Revenues, however, missed the Zacks Consensus Estimate of $6.4 billion.

Deere & Company Price, Consensus and EPS Surprise

Deere & Company Price, Consensus and EPS Surprise | Deere & Company Quote

Deere’s acquisition of the Wirtgen Group in December 2017 added 5% to net sales in the first quarter. Sales also included a favorable currency-translation effect of 3% in the quarter. Region wise, equipment net sales increased 24% in the United States and Canada, and 33% in the rest of the world. Total net sales (including financial services and others) came in at $6.9 billion, up 23% year over year.

Operational Update

Cost of sales in the quarter increased 24% year over year to $4.7 billion. Gross profit in the reported quarter came in at $1.27 billion, advancing 38.5% year over year. Selling, administrative and general expenses flared up 5.6% to $705 million. Operating profit significantly improved to $636 million from $422 million reported in the year-ago quarter.

Segment Performance

Agriculture & Turf segment’s sales increased 18% year over year to $4.24 billion, primarily driven by higher shipment volumes and positive currency-translation impact. Operating profit at the segment climbed 78% year over year to $387 million, driven by higher shipment volumes and lower warranty costs, partially offset by escalated production costs.