Deere Lifts Outlook as Profit Beats Views
Moline, Illinois-based Deere & Co. (NYSE: DE – $82.56) reported a much smaller-than-expected drop in quarterly profit and raised its fiscal-year outlook as cost controls helped the agriculture and construction machinery maker weather difficult markets. Net income fell to $488.8 million, or $1.55 per share, in the third quarter from $511.6 million, or $1.53 per share, a year earlier, when there was more outstanding stock. Analysts on average were expecting $0.94 per share. Revenue decreased 11% percent to $6.72 billion. Deere had previously forecast a 12% decline and the Street was expecting something closer to $6.1 billion. Sales of agricultural and turf equipment slipped 11% to $4.7 billion in the quarter. Its much smaller construction and forestry segment posted a 24% sales decline, to $1.16 billion. Deere, however, was helped by higher prices and lower production costs during the quarter. Overall costs and expenses fell 12% in the period, and the company’s gross margin expanded to 23.3% from 21.7%. Shares of DE popped about 8% on the better-than-expected results and . . .
. . . the company increased its fiscal-year earnings outlook to $1.35 billion from $1.2 billion. The outlook for fiscal 2017 remains much the same and full-year earnings will do well do match the current year’s figure. Nonetheless, for investors with a longer-term horizon, the shares can be held for recovery.