Deere & Co. (NYSE: DE) reported first-quarter fiscal 2018 results before markets opened Friday. The farm and heavy equipment maker posted a net loss of $535.1 million, or a diluted earnings per share loss of $1.66, on revenues of $6.9 billion. In the same period a year ago, the company reported earnings per share (EPS) of $0.62 on revenues of $5.63 billion. First-quarter results also compare to consensus estimates for EPS of $1.20 and $6.42 billion in revenues.

Adjusted to account for changes in U.S. tax law, first-quarter EPS would have been $1.31 on net income of $430 million.

Year over year, quarterly net sales in the worldwide equipment operations group rose 27%. Operating profit rose from $255 million in the year-ago quarter to $415 million, including a $92 million loss related to Deere’s acquisition of Wirtgen.

For fiscal year 2018, Deere raised its estimate for equipment sales growth from 22% to 29%, including a 3% benefit from currency exchange effects. For the second quarter, sales are expected to rise by 30% to 40% year over year, including a 4% currency exchange benefit. Deere’s estimate of net sales growth for the year rose from a prior forecast of 19% to 25% and net income is pegged at $2.1 billion, a decline of $500 million due to the effects of the new tax law. Excluding the tax effects, adjusted net income is expected to be around $2.85 billion.

Analysts have forecast fiscal second-quarter revenues at $9.02 billion and EPS at $2.91. For the full fiscal year, sales are expected to total $31.59 billion and EPS is pegged at $8.40.

CEO Samuel R. Allen said:

Deere has continued to experience strong increases in demand for its products as conditions in key markets show further improvement. Sales gains for the quarter, however, were moderated by bottlenecks in the supply chain and logistical delays in shipping products to our dealers. … Although net income for the quarter and full year are being affected by the upfront costs of U.S. tax reform legislation, we believe the changes will reduce the company’s overall tax rate and be beneficial in the future. At the same time, Deere is in good position to capitalize on the strengthening conditions we see in the world’s agricultural and construction equipment markets.

Shares of Deere traded up about 0.7% at $167.99 in the premarket Friday, in a 52-week range of $106.72 to $171.96. The consensus 12-month price target was $172.50 before the report, and the high target was $213.00.

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