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Iconic farming, forestry and construction equipment maker Deere beat first quarter earnings before the open Friday. $DE maintained guidance citing global risks, higher US dollar and higher raw materials and freight costs fueling higher expenses and uncertainty.

Deere China

Deere & Company NYSE: DE  Reported Earnings Before Open Wednesday

$1.63 Beat $1.30 EPS AND $6.53 billion Beat $6.17 billion forecast in revenue. 

Earnings 

Deere first quarter earnings were reported at $1.63 earnings per share for the quarter, topping the consensus estimate of $1.30 by $0.33.  DE had revenue of $6.53 billion for the quarter, also ahead of the consensus estimate of $6.17 billion. During the same quarter in the prior year, DE announced $1.54 EPS. The firm’s quarterly revenue was down 5.9% compared to the same quarter last year. 

The company also recently declared a quarterly dividend, which was paid on Monday, February 10th. Stockholders of record on Tuesday, December 31st were issued a dividend of $0.76 per share. The ex-dividend date of this dividend was Monday, December 30th. T

Deere & Company NYSE: DE

Market Reaction - Pre-market 178.78 USD +12.95 (+7.81%)

Highlights

“John Deere’s first-quarter performance reflected early signs of stabilization in the U.S. farm sector,” CEO John May said in a statement.

  • Net sales of Equipment Operations dropped 6% to $6.53 billion. 
  • Net sales of Agriculture & Turf fell 4% to $4.48 billion.
  • Net sales of Construction & Forestry decreased 10% to $2 billion. 

Deere Company Q1 2020 Earnings

Deere & Company had a return on equity of 27.11% and a net margin of 8.29%.in 2019

Quarterly dividend of $0.76 per share represents a $3.04 annualized dividend and a dividend yield of 1.68%. Deere & Company’s payout ratio is 30.58%.

The results reflected continued uncertainties in the agricultural sector. Many farmers remained cautious about making major investments in new equipment due to lingering trade tensions as well as difficult growing and harvesting conditions.

Outlook

  • FY2020 net income is expected to be $2.7 billion to $3.1 billion. 
  • FY2020 worldwide sales of agriculture and turf equipment are forecast to decline 5-10%. 
  • FY2020 worldwide sales of construction and forestry equipment are anticipated to be down 10-15%.

Wirtgen Aquisition

Deere Wirtgen

The Wirtgen aquistion last year has expanded $DE into the road construction business that is in a position to gain massively from President Trump's infrastructure spending plans.

Competitors include Caterpillar (CAT), Manitowoc (MTW) and Terex (TEX).

Source: Deere, AlphaStreet

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