Deere Beats Estimates; Raises Guidance
U.S. farm equipment maker Deere & Co. (NYSE: DE – $108.55) reported a 1.8% rise in quarterly revenue, partly helped by stronger pricing, but continued to cope with soft demand. Adjusted net income fell to $193.8 million, or $0.61 per share, in the first quarter from $254.4 million, or $0.80 a year earlier. Total revenue rose to $5.63 billion in the quarter from $5.52 billion a year ago. Analysts were estimating earnings of $0.55 per share on sales of $4.68 billion. Although the Moline, Ill.-based company still expects agriculture and construction sales to be down industry wide, Deere projected 3% revenue growth for its agriculture & turf segment and 7% growth in its construction and forestry business for the fiscal year. as compared with its previous expectation of a decline of 1 percent.
Lower prices for farm commodities and a glut of used equipment have made farmers cautious of buying new equipment, but the company said the market is turning around. “We are seeing signs that after several years of steep declines key agricultural markets may be stabilizing,” said Chief Executive Samuel Allen. The shares have had a nice run over the past year closing in on an all-time high, and I believe long-term growth is still in the picture.