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Earnings for Deere & Co. (DE) in the fourth quarter exploded by 52 percent, as strong demand for agricultural equipment drove high sales; especially for combines and tractors across the world.

Some of the other key factors were the higher grain prices and ethanol production has increased farm income, making more money available for investment in farm equipment.

Morningstar analyst John Kearney said in a research note, "Sharp increases in crop prices amid surging demand for ethanol appear to support expectations for stronger U.S. crop receipts, farm cash income, and machinery demand in 2008."

The company said that agricultural sales should increase by double-digits throughout 2008 as well. When taking into account Deere's historical practice of understating guidance, this should be an extremely strong market.

For the quarter ending on October 31, earnings grew to $422.1 million, or $1.88 a share. Last year in the same period earnings reached $277.3 million, or $1.20 a share. Analysts had expected $1.55 a share, to show how much they outperformed.

Overall revenue for the period also increased significantly over last year, growing to $6.14 billion, in contrast to the $5.8 billion during the same period in 2006.

When taking into account the slowdown in the forestry and construction industry, this are extraordinary numbers and results.

Guidance for the first fiscal quarter, according to Deere & Co., says they should reach a profit of about $325 million. They expect equipment sales to rise by about 12 percent for the year and increase by 25 percent in the first quarter. For the year they project earnings to reach around $2.1 billion.

Morgan Stanley analyst Robert Wertheimer was very upbeat about the long term prospects for the company, as he said "Deere is still in the early stages of a multiyear boom in farm equipment, led by rising ethanol demand." He sees a lot of room for growth with the company.

For the entire fiscal year of the company, revenue was $24.1 billion, an increase of 9 percent from last years' $22.1 billion. Net income for the full year grew to $1.82 billion, growing 8 percent from $1.69 billion. That's equal to $8.01 a share.