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Deere & Company stock surges on Q2 earnings beat

The Yahoo Finance Live team discusses the rise of John Deere shares after the company topped Q2 profit estimates on strong sales numbers, raising the outlook for the company.

Video transcript

JULIE HYMAN: And then finally, in the movers, let's get to what Brian Sozzi likes to call the Julie trade, tractors, because I like to talk about agriculture. John Deere is what we're talking about, reporting a 36% rise in second quarter profit. Strong sales of its tractors and agricultural equipment gave the company a boost in the latest quarter. It also raised its forecast for the rest of the year, and those shares are up about 4%. Look no further than some of the grains prices that we have seen, some of which have wavered a little bit, but still many of which are higher than we have seen in recent years. There's also the idea that some of the supply chain issues that were hurting Deere's manufacturing and supply capacity over the course of the pandemic and beyond, that those are now normalizing in more decided fashion, so that's helping matters, as well.

BRAD SMITH: Yeah, large ag really going to be one of the drivers over the course of fiscal 2023. The company looking for that to move higher up, roughly 10%. So that, particularly, worth tracking going forward. And then additionally, you might see some gains in Europe as well. They said that's going to be flat to up 5%. But there's a lot of other areas that still have an industry outlook, looking at flat and moderately lower, as well.

So it's not all roses in terms of what they are seeing, or green pastures, I guess, I don't know. But at the end of the day, I think for some of the different segments that we're going to be tracking, as well, the price realization and the net sales that they're looking for, net sales for precision and ag up by about 20%. That could continue to be the outsized boom for this business, at least over the next year, our fiscal year, 2023.