Deere Earnings Crush Estimates. The Stock Barely Budges.
The company reported $5.32 in per-share earnings from $10.4 billion in equipment sales, topping expectations for $4.58 a share and $10.3 billion in sales. Estimates are according to Bloomberg and FactSet.
Net income for fiscal year 2021 is now estimated to be roughly $5.8 billion, up from prior guidance of $5.5 billion in net income. The $300 million boost to profit is a little more than the $200-plus million that fiscal third-quarter net income beat projections by.
It’s a solid quarter. The stock might not be up more because there is only one quarter left in fiscal 2021 for Deere and investors, at this point, are more interested in what will happen in 2022. Still, the company demonstrated progress in improving profit margins.
Agriculture-related sales hit $4.3 billion, up 29% year over year. Operating profit grew 50% year over year.
Construction-related sales hit $3 billion, up 38% year over year. Operating profit in that division grew 126% year over year.
Net income at Deere’s financial service arm hit $227 in the quarter, up 24% year over year.
“Our strong results, driven by essentially all product categories, are a testament to the exceptional efforts of our employees and dealers,” said CEO John May in the company’s news release.
The company hosts a conference call at 10 a.m. eastern time to discuss results.
Deere stock is up 33% in 2021, and has gained 88% over the past 12 months.The S&P is up about 17% and 30% over comparable spans.
Deere shares are trading at about 17.6 times 12-month earnings estimates. The S&P is trading at about 20.8 times that number.
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