Deere"s Sales and Earnings Among the Fifth-Highest in Its History
- By Omar Venerio
Deere & Company (DE) gained 4.32% in Wednesday trading, after the company reported fourth quarter, ended Oct. 29, EPS of $1.57 on revenue of $7.09 billion (a 25.5% increase when compared to fourth-quarter 2016), beating revenue estimates by $100 million while profit expectations also were upbeat by 10 cents. Globally, in the trimester net sales and revenues increased 23% to $8.018 billion, and increased 12% to $29.738 billion for the full year. Net sales of the equipment operations were the aforementioned $7.09 billion in the quarter and $25.885 billion for the year.
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The intrinsic value of DE
Samuel R. Allen, chairman and chief executive officer , was pleased with the good year performance for farm and construction equipment , which showed improvement and brought strong result s.
"We saw higher overall demand for our products with farm machinery sales in South America making especially strong gains and construction equipment sales rising sharply. At the same time, the company realized continued benefits from its broad product portfolio and agile cost structure. As a result, Deere has remained well-positioned to serve present customers while making investments aimed at driving growth and attracting additional customers in the future," he said.
In the trimester, there were higher shipment volumes, a favorable product mix and price realization, that were greater than the higher production costs, higher SG & A expenses and an impairment charge for international construction and forestry operations. The full-year improvement was primarily attributed (apart from the same drivers for the quarter) to the gain on the sale of the company"s remaining interest in SiteOne Landscape Supply Inc.
Looking ahead, the company projects sales to increase approximately 22 % for fiscal 2018 and by 38 % for the first quarter compared with the same periods of 2017. Moreover, the future acq uisition of the Wirtgen Group, which is e xpected to close by the end 2017, will contribute about $3.1 billion in net sales in fiscal 2018.
Disclosure: The author holds no position in any stocks mentioned.
This article first appeared on GuruFocus.
Warning! GuruFocus has detected 7 Warning Signs with DE. Click here to check it out.
The intrinsic value of DE
