Deere & Co shares climbed on Friday after the world’s biggest maker of agricultural equipment boosted its outlook for profits and sales in its current fiscal year.

The Illinois-based* company said it expects to generate net income in 2017 of $1.5bn, up by $100m from a previous estimate. Meanwhile, sales are now forecast to rise 4 per cent year-on-year, from a prior outlook of a fall of 1 per cent.

Deere’s more upbeat expectations come as the company cuts costs amid a downturn in the US agricultural market.

US net farm incomes are projected to have fallen by 17.3 per cent in the calendar year 2016, and decline by another 27.8 per cent this year, before stabilising in 2018, according to a report from the US agriculture department.

That has pressured demand for Deere products, like tractors, with some farmers opting to either fix equipment or buy used models.

Deere is looking to cut $500m in costs by 2018 as it works through the soft period.

“Deere continues to perform far better than in agricultural downturns of the past,” said Samuel Allen, chief executive. “This reflects our ongoing success developing a more durable business model and a wider range of revenue sources”.

Deere’s fiscal first quarter 2017 results also beat estimates. Net income was $193.8m, or 61 cents a share, from $254.4m, or 80 cents a share, in the previous year. Net sales were down 1 per cent to $4.7bn. Wall Street analysts had forecast EPS of 55 cents, on sales of $4.63bn.

“Although the quarter’s sales and earnings were somewhat lower than last year, all of our businesses remained solidly profitable,” said Mr Allen.

Deere shares were up by 2 per cent in pre-market trading.

*This post has been amended to correct the location of the group’s headquarters.

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