What to look for when Deere & Company (DE) reports Q4 2023 results

Deere & Company (NYSE: DE), a market leader in the production and supply of farm machinery and industrial equipment, will be reporting third-quarter results on Wednesday amid expectations for a mixed outcome. The market will be closely following the event, against the backdrop of the recent weakness in crop prices weighing on the demand for agricultural equipment.

The company’s stock, which has been on the growth path for quite some time, grew at an accelerated pace in the past few years. It peaked in July this year, before losing steam and entering a volatile phase. DE has gained 6% in the past six months but it continues to languish below the 52-week average. The company has raised its dividend at regular intervals and currently pays $1.05 per share. The current yield is 1.2%. While the stock’s resilience makes it attractive, the valuation is a bit too high.

Q4 Report Due

Deere is all set to release results for the final three months of fiscal 2023 on November 22 at 6:30 a.m. ET. The consensus earnings estimate is $6.84 per share, vs. $7.44 per share last year.  Revenue is expected to decline 13.3% annually to $12.44 billion.

Deere’s quarterly revenues topped Wall Street’s expectations consistently for more than four years, while earnings beat for the fourth straight quarter. In the most recent quarter, sales grew across all five operating segments, resulting in a 12% rise in total revenues to $15.8 billion.

“Deere is well on the way to another year of exceptional achievement due in large part to positive fundamentals in the farm and construction sectors and the unwavering commitment of the Deere team, including our dealers and suppliers. Fundamentals are expected to continue fueling solid demand for our equipment, supported by a strong advance-order position. At the same time, through the company’s smart industrial operating model, we are delivering differentiated value to our customers, enabling them to do their jobs more profitably and sustainably,” said Deere’s CEO John May.

Earnings

At $10.2 per share, net income was up a whopping 65% year-over-year in Q3. For fiscal 2023, the management expects net income to be in the range of $9.75 billion to $10.0 billion, the mid-point of which is up 38% from the profit the company generated a year earlier.

Shares of Deere closed the last trading session down 1% after opening the day lower. The stock has gone through a series of ups and downs since the beginning of the year.