Deere & Company (DE) Tops Q4 Earnings, Revenues Miss
Deere & Company DE is the world’s leading manufacturer of agricultural machinery with a market capitalization of $25 billion. It also produces a variety of commercial and consumer equipment; and a broad range of construction and forestry equipment. Deere’s financial services primarily provide credit services, which mainly finance sales and leases of equipment by John Deere dealers and trade receivables purchased from the equipment operations.
The company, best known for its John Deere tractors, has been challenged with falling demand for agricultural equipment as lower crop prices take their toll on the U.S farm income. Deere has thus resorted to production cutbacks, lay-offs, along with seasonal plant shutdowns to remain profitable in the wake of lower sales. On the contrary, Construction & Forestry equipment sales are expected to grow as the leading indicators for construction activity continue to trend up, boding well for Deere.
Investors have thus been eagerly awaiting the company’s latest earnings report. Let’s have a quick look at the Illinois-based company’s fourth quarter fiscal 2015 earnings release.
Estimate Trend & Surprise History
You should note that the earnings estimate revisions for Deere depicted a neutral stance prior to the earnings release. The Zacks Consensus Estimate has remained stable over the last 30 days and currently stands at 74 cents for the fourth quarter.
Deere has outpaced the Zacks Consensus Estimate in the trailing 4 quarters with an average beat of around 21.04%.
Earnings
Deere posted earnings of $1.08 per share in the fourth quarter, beating the Zacks Consensus Estimate of 74 cents. However, earnings plunged roughly 41% year over year due to sluggish global markets for farm and construction equipment.
Revenues
Deere reported fourth quarter revenues of $5.932 billion, falling short of the Zacks Consensus Estimate of $6.131 billion.
Key Stats
Deere projects total equipment sales to decline 7% year over year in fiscal 2016 and to be down about 11% in the first quarter of fiscal 2016 compared with year-ago periods. The projection includes a negative currency-translation effect of about 2% for the full year and 4% for the first quarter. For fiscal 2016, net income attributable to Deere & Company is anticipated to be about $1.4 billion.
Zacks Rank
Currently, Deere has a Zacks Rank #4 (Sell) depicting the weak demand for agricultural equipment. However, this could change following Deere’s earnings report which was just released.
Market Reaction
Deere shares were inactive following the release. It would be interesting to see how the market reacts to the results during the trading session today.
Check back later for our full write up on this Deere earnings report later!
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
DEERE & CO (DE): Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
