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Iconic farming, forestry and construction equipment maker Deere is now seen as a rare hybrid of industrials and tech or Ag Tech. $DE beat second quarter earnings before the open Friday.  Supply cain issues are in focus. ARK Invest sees it as a tech company adding it to ARKQ.

Deere China

Deere & Company NYSE: DE  Reported Earnings Before Open Wednesday

$5.68 Beat $4.52 EPS AND $6.53 billion Beat $6.17 billion forecast in revenue. 

Earnings 

Deere reported earnings for the quarter ending in April of $5.68 per share, more than double from the same period last year and mashing Street consensus forecasts of $4.52 per share. Revenue was $12.1 billion, a 30% increase. That topped analysts' expectations for $10.44 billion in sales.

Deere & Company NYSE: DE

Market Reaction - Pre-market $360.48 ▲ 5.26 (+1.48%)

Highlights

  • Group worldwide sales rose 30% from last year to $12.058 billion, topping analysts' estimates of $10.44 billion tally.
  • Equipment operations clocked in at $10.998 billion in the quarter, compared to $8.224 billion in the year-earlier quarter.

"With another quarter of solid performance, John Deere closed out the first half of the year on a highly encouraging note," said CEO John May. "Our results received support across our entire business lineup, reflecting healthy worldwide markets for farm and construction equipment."

DE Earnings Q2 21

Supply Chain Pressures

"While the company is clearly performing at a high level, Deere expects to see increased supply-chain pressures through the balance of the year," CEO May added. "We are working closely with key suppliers to secure the parts and components that our customers need to deliver essential food production and infrastructure." "Despite these challenges, Deere is on track for a strong year and we believe is well-positioned to unlock greater value for our customers and other stakeholders in the future." ''

Deere's larger rival, Caterpillar Inc last month posted much stronger-than-expected first quarter earnings of $2.87 per share, on revenues of $11.9 billion,  A surge in construction sales in Asia and Latin America has boosted CAT. Caterpillar CFO Andrew Bonfield told investors on a conference call that while the group remains "positive" in terms of the impact of rising input costs and supply-chain risks, "we're diligently monitoring the risks and their potential impact going forward."

Outlook

Group worldwide sales, Deere said, rose 30% from last year to $12.058 billion, against topping analysts' estimates of a $10.44 billion tally. Looking into the end of the 2021 fiscal year, Deer said it sees overall net income of between $5.3 billion and $5.7 billion, up from its last forecast of between $4.6 billion to $5 billion. That implies earnings in the range of $14.65 to $15.95 per share.'

"With another quarter of solid performance, John Deere closed out the first half of the year on a highly encouraging note," said CEO John May. "Our results received support across our entire business lineup, reflecting healthy worldwide markets for farm and construction equipment."

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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