Categories Earnings, Industrials
Deere & Company (DE) earnings preview: Demand, weather to determine Q4 outcome
The ongoing slowdown in the demand for agricultural equipment, amid market uncertainties and bad weather, has been a drag on the business of Deere & Company (NYSE: DE), which will be publishing fourth-quarter results Wednesday at 6:45 am ET.
Farmers continue to be cautious in their spending, concerned about the decline in the market price of their produces, mainly corn. Sales have been impacted by trade-war related uncertainties as China remains a key market for farm implement manufactures in the US. These factors, combined with high operating costs and unfavorable weather conditions, might have a negative impact on margins.
What to Look for
On the positive side, the top-line will likely benefit from the stable performance by the Construction & Forestry segment and favorable conditions in the South American market, especially Brazil. The measures being adopted by the management to reduce costs and improve the product portfolio, through the integration of new technology, might offset the pressure on profitability to some extent.
Market watchers predict a 7% decline in earnings to $2.14 per share for the fourth quarter on revenues of $8.55 billion, which is up 2.5% year-over-year. Earnings missed the Street view in each of the trailing four quarters. Deere executives are expected to drop hints on the long-term growth strategy at the upcoming conference call.
Past Performance
For the third quarter, the company posted stronger-than-expected revenues of $10 million. Though earnings increased annually, they fell short of expectations. The results were negatively impacted by the general softness in the farm sector and unfavorable foreign exchange rates.
Almost half of the analysts following Deere recommend hold, with a price target of $171. Earlier this month, Deere shares climbed to a record high, continuing the uptrend that started several months ago. The stock advanced 14% so far this year, despite some volatility, and outperformed the market.
Caterpiller Disappoints
Caterpillar (CAT), another leading provider of agricultural equipment, registered lower sales for its key business divisions in the third quarter. The top-line declined 6% to $13 billion and earnings dropped 7% to $2.66 per share. The company also projected flat sales for the fourth quarter.
Most Popular
Earnings calendar for the week of January 18
While the markets got a boost a couple of weeks ago after Congress passed the new stimulus bill, investors seem to have adopted a cautious stance as details of the
DAL Earnings: All you need to know about Delta Air Lines Q4 2020 earnings results
Delta Air Lines (NYSE: DAL) reported fourth quarter 2020 earnings results today. Operating revenues fell 65% year-over-year to $4 billion. The company reported a GAAP net loss of $755 million,
Aphria Inc. (APHA) reports Q2 2021 Earnings
Aphria Inc. (NYSE: APHA) reported second-quarter 2021 earnings results on Thursday. Revenues were C$160.5 million, an increase of 33% compared to the previous year. On an adjusted basis, the company reported earnings
