Deere & Co. reported a much smaller-than-expected decline in quarterly earnings Nov. 22, after it cut costs and raised prices to compensate for sluggish demand for its agricultural and construction equipment, and its shares jumped more than 10 per cent.

The company forecast revenue for the new fiscal year would fall about one per cent from $26.6 billion in 2016 (all figures U.S. funds), with net income declining to about $1.4 billion from $1.52 billion in 2015.

The outlook “tells you that the global farm recession will continue,” Argus Research analyst Bill Selesky said. “The farm economy will not get better until you see farmer income levels rising, which have not for some years.”

Net income attributable to Deere fell to $285.3 million, or 90 cents per share, in the fourth quarter ended on Oct. 31 from $351.2 million, or $1.08 per share, a year earlier.

Analysts on average had expected 40 cents per share, according to Thomson Reuters I/B/E/S.

“It was all kind of internal — either pricing or cost cutting,” said Jefferies analyst Stephen Volkmann. “It’s not that the cycle is turning, it is that they are managing it better than before.”

Revenue fell three per cent to $6.52 billion, beating analysts’ estimates of $5.38 billion.

Deere said it expected its equipment sales to decrease about one per cent for fiscal 2017 and to fall about four per cent in the first quarter from a year earlier.

Weak commodity prices and low farm income are both expected to contribute to a five per cent to 10 per cent decline in full-year 2017 U.S. agricultural and turf industry sales of both large and small equipment, the company said.

Deere said it expected industry sales to decline about five per cent in the European Union in full-year 2017.

The company said improving economic and political conditions in Brazil and Argentina could contribute to an industry sales increase of 15 per cent of tractors and combines in South America.