Deere crushes earnings and has a bullish outlook for the US housing market

John Deere reported second-quarter earnings on Friday morning that smashed expectations on profit and revenues.

Earnings per share came in at $2.03, much better than expectations for $1.56, according to Bloomberg. The company reported sales of $8.17 billion, beating estimates for $7.51 billion.

Shares rose about 2% in pre-market trading.

Deere is the world's leading seller of farming equipment. The company also produces heavy construction equipment like bulldozers and excavators.

In Friday's earnings statement, the company also had an upbeat outlook for the US housing market:

"The sales improvement reflects economic growth and higher housing starts in the U.S. offset in part by weakening conditions in the energy sector and energy-producing regions as well as lower sales outside the U.S. and Canada."

Deere forecast that sales of construction and forestry equipment will increase 2% this year, with sales improvements in the US and Europe offsetting declines elsewhere.

Housing starts data has been mixed this year, but in May, we saw starts surge to the highest level since November 2007.

Deere, however, has a bleak outlook for the agricultural sector, saying it sees weak demand for tractors and other heavy machinery.

The company expects total equipment sales will fall about 19% this year.