Sector Wrap: Heavy Equipment Cos. Mixed

Deere said Wednesday it expects 2008 earnings of about $2.1 billion, which Goldman Sachs analyst Terry Darling puts at $9.65 per share, based on the farm equipment maker's 218 million shares outstanding. Analysts polled by Thomson Financial expect $9.40 per share.

Darling said companies including Terex Corp., Oshkosh Truck Corp., CNH Global NV, and Caterpillar Inc. should benefit from the positive forecast.

Robert W. Baird analyst Robert McCarthy noted the company has improved its competitive position with large commercial and infrastructure contracts, but production rates are expected to decline in preparation for a further slowdown in demand.

Also, the company's rapidly growing commercial grounds care equipment, irrigation products, and wholesale nursery operations will potentially offset losses from a weakened housing market, he said.

He added recent corn price increases resulting from booming ethanol demand suggest that North American farm machinery sales should surge in 2008.

McCarthy maintained a "Neutral" rating and $135 price target on the stock.

Deere's shares rose $7.06, or $4.9 percent, to $152.06.

Shares of CNH Global NV, a Dutch maker of farm and construction equipment, rose $1.62, or 3.2 percent, to $52.67.

Agco Corp., a Duluth, Ga.-based manufacturer and distributor of agricultural equipment, rose $2.38, or 4.1 percent, to $60.56.

Terex Corp. rose $1.11, or 1.9 percent, to $58.61

Among companies that focus more on industrial and construction equipment, shares of Manitowoc Co. fell 66 cents to $38.33, while Caterpillar Inc. slipped 34 cents to $67.94.