Deere (DE) Q2 Earnings & Revenues Top Estimates, '21 View Up
Deere & Company DE posted second-quarter fiscal 2021 (ended Apr 30, 2021) earnings of $5.68 per share, beating the Zacks Consensus Estimate of $4.44. The reported figure also surged 169.2% from the prior-year quarter.
Net sales of equipment operations (which comprise Agriculture and Turf, Construction and Forestry) came in at $11 billion, increasing 34% year over year. Revenues also surpassed the Zacks Consensus Estimate of $10.4 billion. Total net sales (including financial services and others) came in at $12 billion, up 30% year over year.
Operational Update
Cost of sales in the reported quarter was up 26% year over year to $8 billion. Total gross profit for the reported quarter flared up 59% year over year to $3 billion. Selling, administrative and general expenses slid 7.5% to $838 million from the prior-year quarter. Equipment operations reported an operating profit of $2,144 million in the quarter compared with $890 million witnessed in the prior-year quarter. Total operating profit (including financial services) soared 153% year over year to $2,439 million in the fiscal second quarter.
Deere & Company Price, Consensus and EPS Surprise
Deere & Company price-consensus-eps-surprise-chart | Deere & Company Quote
Segment Performance
The Production & precision ag segment’s sales were up 35% year on year to $4.5 billion, primarily driven by higher shipment volumes and price realization. Operating profit in the segment increased 77% year over year to $1,007 million.
Small ag & turf sales increased 30% to $3.4 billion from the year-earlier quarter on higher shipment volumes, price realization and the favorable impact of currency translation. This segment’s operating profit jumped a whopping 187% year over year to $648 million.
Construction & forestry segment sales came in at $3 billion, suggesting year-over-year growth of 36%, driven by higher shipment volumes, price realization and the favorable impact of currency translation. The segment’s operating profit skyrocketed 409% year on year to $489 million.
Net revenues in Deere’s Financial Services division came in at $892 million in the reported quarter, up 2% year on year. The segment’s operating profit came in at $295 million, up 293% year over year.
Financial Update
Deere reported cash and cash equivalents of $7.2 billion at the end of fiscal second-quarter 2021 compared with $8.9 billion recorded in the prior-year quarter. Cash generated from operating activities was $1,786 million in the first half of fiscal 2021, compared with $776 million in the first half of fiscal 2020. At the end of the fiscal second quarter, long-term borrowing was roughly $33 billion compared with $34 billion witnessed at the end of the year-ago quarter.
Outlook
The company now expects net income for fiscal 2021 between $5.3 billion and $5.7 billion, up from the prior projection of $4.6 billion and $5 billion.
Price Performance
Deere’s shares have appreciated 155.9% over the past year, outperforming the industry’s growth of 147.6%.
Zacks Rank and Other Stocks to Consider
Deere currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Few other similar-ranked stocks in the Industrial Products sector include AGCO Corporation AGCO, Avery Dennison Corporation AVY and Caterpillar Inc. CAT.
AGCO Corporation has a projected earnings growth rate of 54.6% for the current year. Shares of the company have soared 217% over the past year.
Avery Dennison has an estimated earnings growth rate of 20.8% for 2021. The company’s shares have rallied 112% in a year’s time.
Caterpillar has an expected earnings growth rate of 45.6% for the ongoing year. Over the past year, the stock has appreciated 131%.
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