Wednesday, May 18, 2011

Deere (DE) Beats by 6 Cents, Raises Internal Guidance

It continues to be times of plenty for the agricultural economy.  Deere (DE) reported this morning and beat estimates by 6 cents while raising (their own) guidance across the board.  Full report here.

Via Bloomberg:

  • Deere & Co, the world’s largest farm-equipment maker, raised its fiscal 2011 earnings forecast and posted second-quarter profit that beat analysts’ estimates amid increasing demand for agriculture and construction equipment.
  • Earnings will be $2.65 billion in the year through October, more than the $2.5 billion forecast in February, Moline, Illinois-based Deere said today in a statement. The average analysts’ estimate in a Bloomberg survey was for profit of $2.67 billion, or $6.26 a share.
  • Deere said equipment sales will rise 21 percent to 23 percent in fiscal 2011, up from a previous projection for an 18 to 20 percent increase. Equipment sales in fiscal 2010 were $23.6 billion.
  • Net income gained 65 percent to $904.3 million, or $2.12 a share, in the quarter through April, from $547.5 million, or $1.28, a year earlier, Deere said in the statement. The average analyst estimate in the survey was for earnings of $2.06 a share. Total sales rose 25 percent to $8.91 billion from $7.13 billion a year earlier. 

More comments:
  • The March earthquake and tsunami in Japan will reduce full-year sales by about $300 million and operating profit by $70 million.

Par for the course, sales outside the U.S. far outpaced domestic demand - even with the raging bull market in U.S. agriculture.  The weakness in the dollar also helped.
  • Equipment net sales in the United States and Canada increased 17 percent for the quarter and were up 24 percent year to date. Outside the U.S. and Canada, net sales were up 45 percent for the quarter and 36 percent for six months, with favorable currency-translation effects of 8 percent and 4 percent for these periods.

That said, the stock - like everything 'beta' or commodities related has been beaten over the head the past few weeks.

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