(Reuters) – Deere & Co beat analysts’ expectations for third-quarter profit on Thursday as tighter pricing and cost control measures protected the company’s margins from weak demand for farm equipment, sending the company’s shares up 4% in pre-market trading.

US machine manufacturers have managed to maintain the price increases they introduced two years ago. This was triggered by complications in the supply chain and a sharp increase in demand for industrial and agricultural equipment.

The higher prices have helped agricultural machinery manufacturers protect their profits from a fall in demand for new machinery due to falling crop prices and high credit costs. This has also forced dealers to limit their stockpiling.

Deere was able to maintain its net profit at around $7 billion in 2024, even though U.S. farm incomes are forecast to collapse in 2024 due to a sharp decline in crop prices, increased production costs and shrinking government support.

In the third quarter, revenue in the company’s production and precision agriculture segment, which includes larger farm equipment, fell 25% to $5.1 billion due to lower shipment volumes, but was partially offset by price reductions.

“In response to weak market conditions, we have taken steps to reduce costs and strategically align our production with customer needs,” said CEO John C. May.

Deere announced in June that it would cut an unspecified number of manufacturing jobs and reduce the number of employees to control costs. The company has also taken measures to control its inventory.

For the third quarter, Deere reported net income of $6.29 per share, compared to analysts’ average estimate of $5.63, according to LSEG data.

Net sales and earnings decreased 17% to $13.15 billion.

(Reporting by Shivansh Tiwary in Bengaluru; Editing by Shinjini Ganguli)