Deere & Company, the world’s largest agricultural equipment manufacturer, last week outperformed its quarterly sales and profit estimates and forecast a smaller-than-anticipated decline in farm equipment sales for the year.

Company shares, which were hit hard in March due to the escalating coronavirus pandemic, were up nearly 4% May 27, which experts say signals a step toward recovery.

But Deere & Co., doing business under the brand name John Deere, isn’t in the clear yet, and the company warned investors COVID-19 would likely impact full fiscal year sales.

“The virus has been a huge disruption, but it’s planting season in North America, so I would say Deere has just been so fiercely focused on keeping operations going, distribution running and strategically working with our supply chain to meet demand,” Jen Hartmann, spokeswoman for John Deere, told the Capital Press.

Financial analysts say the company’s slight uptick in sales was likely a combination of timing because spring is a high-demand season, the gradual reopening of the economy and a byproduct of additional liquidity farmers expect from the federal government’s $19 billion farm relief program.

Cory Reed, president of John Deere’s ag and turf division, said on a recent investor call government aid programs have had a “leveling effect,” keeping farmers profitable, and insurance programs have given farmers some security — allowing them to continue buying equipment.

Deere & Co. declined to comment on specifics of its customer base or whether any of its purchases were internal.

Like many companies, Deere & Co. experienced supply chain disruptions during the shutdowns. The company forecasts delayed shipments will catch up in the remainder of the year.

“I can’t think of a single industry that wasn’t impacted in some way by supply chain disruptions,” said Hartmann.

Despite its move toward recovery, the company still has an uphill climb.

On its investor call, Deere & Co. forecast total 2020 profit in a range from $1.6 billion to $2 billion, down 39% to 51% from the previous year. In the quarter, total net income fell 41% to $666 million, or $2.11 per share. That’s lower than year-ago earnings of $3.52 per share, but it beat analysts’ average estimate of $1.62 per share, according to data from Refinitiv, a financial market data company.

Deere executives say they expect overall North American farm and turf equipment sales to decrease between 10% to 15% this year. Jeffries financial analyst Stephen Volkmann called this sales outlook “surprisingly benign.”

According to the company’s financial results, the construction and forestry equipment division was hit hardest in the second quarter, dropping 25% from $2.99 billion in 2019 to $2.26 billion.

Joel Tiss, financial analyst at BMO, said demand for agricultural equipment, such as tractors, has held up better than other categories of equipment, but he warned that limited gasoline use, which impacts ethanol demand, will likely have an impact on corn prices into 2021.

Hartmann of John Deere said the company anticipates people will begin to drive again and oil prices will gradually rebound, but it will take time.

Financial analysts say in spite of the company’s projected 2020 outcome, its better-than-expected spring performance shows that better times may be on the way.

Brent Norwood, in investor relations at John Deere, told investors May 22 favorable spring weather has resulted in above-average planting progress, but challenges remain.

“Despite the recovery in planted acres, the current environment is weighing on farmer sentiment as near-term demand for agricultural commodities remains uncertain,” said Norwood.

Deere & Co., Hartmann said, will “continue to focus on what (it) can control.”