Conservative · Stocks to Consider and Updates

Deere Delivers Solid Results; Raises Guidance

Shares of agricultural equipment manufacturer Deere & Co. (NYSE: DE – $169.44) traded at a new all-time high after posting strong sales and earnings for its fiscal first quarter. Adjusted earnings of $1.31 per share, up from $0.61 in the same period a year ago, topped estimates of $1.20 on revenue of $6.91 billion. Worldwide revenue was up from $5.63 billion in the same period last year and ahead of Street expectations of $6.41 billion, helped by the company’s December acquisition of the Wirtgen Group. In addition to Deere’s ag business, construction and forestry operations also contributed to the strong results, with sales gains for the period of 57% as compared to a year ago due to higher shipment volumes and favorable currency translation.

       The company meanwhile revised its fiscal year 2018 sales guidance and now expects revenue to increase 25% from $29.74 billion reported in 2017, up from the company’s earlier expectation of a 19% increase. The new guidance implies an expectation of $37.18 billion in revenue, topping the Street projection of $32.3 billion. Analysts are forecasting earnings per share for this year at $8.45 (compared to fiscal 2017’s $6.50/share) and possibly $10.19 for next year. Positions in Deere can continue to be held as a core holding in most conservative accounts. The shares also provide investors with a yield of 1.44%, and dividend increases are indeed likely.

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