Deere & Co. shares jumped more than 5% on Friday after the world’s largest farm-equipment maker reported record quarterly profits on a surge in equipment sales.

For the second quarter, Deere’s net income rose 50% to $1.21 billion, or $3.67 per share, while worldwide net sales and revenues increased 29% to $10.72 billion.

Adjusted earnings came to $3.14 per share, missing analysts’ estimates of $3.30 per share, but Deere’s stock still rose 5.75% to $155.25 in trading Friday. The stock is up 14.7% so far this month.

“John Deere reported another quarter of strong performance helped by a broad-based improvement in market conditions throughout the world and a favorable customer response to our lineup of innovative products,” CEO Samuel R. Allen said in a news release.

“Farm machinery sales in both North and South America are making solid gains and construction equipment sales are continuing to move sharply higher,” he added.

Equipment net sales surged 34% to $9.75 billion for the quarter, with Deere’s acquisition of road construction equipment maker Wirtgen Group in December 2017 adding 12% to sales. The segment’s operating profit rose 17.4% to $1.315 billion, primarily driven by higher shipment volumes and lower warranty costs.

In a conference call with analysts, Deere executives said the strong results were offset by rising costs of raw materials, particularly steel, as well as increased costs for freight and for research and development.

“Material and freight costs have exceeded our forecast for the year due largely to inflation in U.S. steel prices and a tight market for logistics providers,” CFO Raj Kalathur said on the call.

But Allen said the cost increases “are being addressed through a continued focus on structural cost reduction and future pricing actions.”

The strong quarter led Deere to raise its full-year outlook for profits to about $2.3 billion, up from its forecast of $2.1 billion a quarter ago. “We are encouraged by strengthening demand for our products and believe Deere is well-positioned to capitalize on further growth in the world’s agricultural and construction equipment markets,” Allen said.”

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