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Deere (DE) Earnings & Revenues Beat Estimates in Q1, View Up
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Deere & Company (DE - Free Report) reported first-quarter fiscal 2022 (ended Jan 30, 2022) earnings of $2.92 per share, beating the Zacks Consensus Estimate of $2.28. The bottom line declined 25% from the prior-year quarter’s levels. Higher production costs owing to supply chain challenges and ratification of the UAW contract impacted bottom-line results.
Net sales of equipment operations (comprising Agriculture and Turf, Construction and Forestry) were $8,531 million, up 6% year over year. Revenues surpassed the Zacks Consensus Estimate of $8,093 million. Total net sales (including financial services and others) were $9,569 million, up 5% year over year.
Operational Update
The cost of sales in the reported quarter was up 15.3% year over year to $6,695 million. Total gross profit in the reported quarter declined 18.3% year over year to $1,836 million. Selling, administrative and general expenses rose 1.6% to $781 million from the prior-year period’s levels.
Equipment operations reported an operating profit of $939 million in the quarter compared with $1,380 million in the year-earlier quarter. Total operating profit (including financial services) declined 25% year over year to $1,235 million in the fiscal first quarter.
The Production & Precision Agriculture segment’s sales rose 9% year over year to $3,356 million, primarily driven by higher shipment volumes and price realization. Operating profit in the segment declined 54% year over year to $296 million.
Small Agriculture & Turf sales rose 5% to $2,631 million from the year-earlier quarter’s levels as benefits from price realization more than offset lower shipment volumes. The segment’s operating profit fell 21% year over year to $371 million.
Construction & forestry segment sales were $2,544 million, up 3% year over year, backed by higher shipment volumes and price realization. The segment’s operating profit inched up 1% year over year to $272 million.
Net revenues in Deere’s Financial Services division were $870 million in the reported quarter, down 2% year on year. The segment’s operating profit amounted to $296 million, up 15% year over year.
Financial Update
Deere reported cash and cash equivalents of $4,472 million at the end of first-quarter fiscal 2022 compared with $6,962 million recorded at the end of the year-ago quarter. Cash utilized in operating activities was $2,553 million in the fiscal first quarter against cash generation of $143 million in the prior-year quarter. At the end of the quarter, the long-term borrowing was nearly $33 billion, unchanged year over year.
Outlook
Deere now expects net income for fiscal 2022 between $6.7 billion and $7.1 billion, up from the prior estimate of $6.5-$7 billion. Demand for farm and construction equipment will continue to be supported by positive fundamentals.
Price Performance
Deere’s shares have gained 16.6% in the past year compared with the industry’s growth of 11.8%.
Dover’s fourth-quarter 2021 adjusted earnings per share (EPS) increased 15% year over year to $1.78, beating the Zacks Consensus Estimate of $1.66. DOV has a trailing four-quarter earnings surprise of 12.3%, on average.
Dover has an estimated earnings growth rate of around 12.7% for 2022. In the past 60 days, the Zacks Consensus Estimate for current-year earnings has been revised upward by 5%. DOV’s shares have rallied around 32.1% in a year.
Silgan Holdings’ fourth-quarter 2021 adjusted EPS increased 32% year over year to a record 79 cents, beating the Zacks Consensus Estimate of 73 cents. SLGN has a trailing four-quarter earnings surprise of 3.8%, on average.
Silgan has a projected earnings growth rate of 13.5% for the current year. The Zacks Consensus Estimate for 2022 earnings has moved north by 3% in the past 60 days. In a year, SLGN has appreciated 11.7%.
Applied Industrial Technologies reported adjusted EPS of $1.46 in second-quarter fiscal 2022 (ended Dec 31, 2020), up 49% year on year and beating the Zacks Consensus Estimate of $1.09. AIT has a trailing four-quarter earnings surprise of 27.9%, on average.
Applied Industrial Technologies has an expected earnings growth rate of 24.8% for fiscal 2022. The Zacks Consensus Estimate for fiscal year earnings has moved up 9.4% in the past 60 days. AIT’s shares have appreciated 20.2% in a year.
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Deere (DE) Earnings & Revenues Beat Estimates in Q1, View Up
Deere & Company (DE - Free Report) reported first-quarter fiscal 2022 (ended Jan 30, 2022) earnings of $2.92 per share, beating the Zacks Consensus Estimate of $2.28. The bottom line declined 25% from the prior-year quarter’s levels. Higher production costs owing to supply chain challenges and ratification of the UAW contract impacted bottom-line results.
Net sales of equipment operations (comprising Agriculture and Turf, Construction and Forestry) were $8,531 million, up 6% year over year. Revenues surpassed the Zacks Consensus Estimate of $8,093 million. Total net sales (including financial services and others) were $9,569 million, up 5% year over year.
Operational Update
The cost of sales in the reported quarter was up 15.3% year over year to $6,695 million. Total gross profit in the reported quarter declined 18.3% year over year to $1,836 million. Selling, administrative and general expenses rose 1.6% to $781 million from the prior-year period’s levels.
Equipment operations reported an operating profit of $939 million in the quarter compared with $1,380 million in the year-earlier quarter. Total operating profit (including financial services) declined 25% year over year to $1,235 million in the fiscal first quarter.
Deere & Company Price, Consensus and EPS Surprise
Deere & Company price-consensus-eps-surprise-chart | Deere & Company Quote
Segment Performance
The Production & Precision Agriculture segment’s sales rose 9% year over year to $3,356 million, primarily driven by higher shipment volumes and price realization. Operating profit in the segment declined 54% year over year to $296 million.
Small Agriculture & Turf sales rose 5% to $2,631 million from the year-earlier quarter’s levels as benefits from price realization more than offset lower shipment volumes. The segment’s operating profit fell 21% year over year to $371 million.
Construction & forestry segment sales were $2,544 million, up 3% year over year, backed by higher shipment volumes and price realization. The segment’s operating profit inched up 1% year over year to $272 million.
Net revenues in Deere’s Financial Services division were $870 million in the reported quarter, down 2% year on year. The segment’s operating profit amounted to $296 million, up 15% year over year.
Financial Update
Deere reported cash and cash equivalents of $4,472 million at the end of first-quarter fiscal 2022 compared with $6,962 million recorded at the end of the year-ago quarter. Cash utilized in operating activities was $2,553 million in the fiscal first quarter against cash generation of $143 million in the prior-year quarter. At the end of the quarter, the long-term borrowing was nearly $33 billion, unchanged year over year.
Outlook
Deere now expects net income for fiscal 2022 between $6.7 billion and $7.1 billion, up from the prior estimate of $6.5-$7 billion. Demand for farm and construction equipment will continue to be supported by positive fundamentals.
Price Performance
Deere’s shares have gained 16.6% in the past year compared with the industry’s growth of 11.8%.
Image Source: Zacks Investment Research
Zacks Rank & Stocks to Consider
Deere currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the Industrial Products sector include Dover Corporation (DOV - Free Report) , Silgan Holdings Inc. (SLGN - Free Report) and Applied Industrial Technologies, Inc. (AIT - Free Report) , each carrying a Zacks Rank #2 (Buy), at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Dover’s fourth-quarter 2021 adjusted earnings per share (EPS) increased 15% year over year to $1.78, beating the Zacks Consensus Estimate of $1.66. DOV has a trailing four-quarter earnings surprise of 12.3%, on average.
Dover has an estimated earnings growth rate of around 12.7% for 2022. In the past 60 days, the Zacks Consensus Estimate for current-year earnings has been revised upward by 5%. DOV’s shares have rallied around 32.1% in a year.
Silgan Holdings’ fourth-quarter 2021 adjusted EPS increased 32% year over year to a record 79 cents, beating the Zacks Consensus Estimate of 73 cents. SLGN has a trailing four-quarter earnings surprise of 3.8%, on average.
Silgan has a projected earnings growth rate of 13.5% for the current year. The Zacks Consensus Estimate for 2022 earnings has moved north by 3% in the past 60 days. In a year, SLGN has appreciated 11.7%.
Applied Industrial Technologies reported adjusted EPS of $1.46 in second-quarter fiscal 2022 (ended Dec 31, 2020), up 49% year on year and beating the Zacks Consensus Estimate of $1.09. AIT has a trailing four-quarter earnings surprise of 27.9%, on average.
Applied Industrial Technologies has an expected earnings growth rate of 24.8% for fiscal 2022. The Zacks Consensus Estimate for fiscal year earnings has moved up 9.4% in the past 60 days. AIT’s shares have appreciated 20.2% in a year.