Back to top

Analyst Blog

Deere & Company (DE - Analyst Report) is slated to report its third-quarter fiscal 2012 results before the market opens on August 15. The Zacks Consensus Estimate for earnings for the quarter is $2.32 cents per share, representing an estimated year-over-year increase of 36.98%. Revenues, as per the Zacks Consensus Estimate, are $9.49 billion.

Second Quarter Synopsis

The company reported adjusted earnings of $2.61 per share, beating the Zacks Consensus Estimate of $2.54 and exceeding the year-ago earnings of $2.12.

Worldwide total sales in the reported quarter increased 12% year over year to $10 billion, surpassing the Zacks Consensus Estimate of $9.67 billion.  

Deere, which competes with companies like AGCO Corporation (AGCO - Analyst Report), CNH Global NV , experienced healthy growth in its top line due to double-digit sales expansion in its Agriculture & Turf segment as well as Construction & Forestry segment.

Estimate Revision Trend

Agreement

Out of the 16 analysts covering the stock, none have revised their estimates for the third quarter in either direction over the last 7 days. Only one analyst has revised his/her estimate downward over the last 30 days.

Similarly, for fiscal 2012, none of the analysts revised their estimates over the last 7 days. Two analysts have lowered their estimates over the last 30 days while none have raised.

Magnitude

The Zacks Consensus Estimates remained the same for both the third quarter and fiscal 2012 over the last 7 days. Over the last 30 days, the Zacks Consensus Estimate declined by a penny (to $2.32 per share) for third quarter and 3 cents (to $8.24 per share) for fiscal 2012.

Earnings Surprise History

With respect to earnings surprise, Deere has topped the Zacks Consensus Estimate in all the last four quarters. The company delivered an average positive earnings surprise of 5.18% over the preceding four quarters, implying that it has beaten the Zacks Consensus Estimate by that measure.

Our Take

Strong demand for agricultural commodities and global increase in farm income has boosted the demand for Deere’s products. The United States Department of Agriculture forecasts net farm income to be around $91.7 billion in 2012. The expectation of a record corn production in 2012 will encourage farmers to invest in the latest machinery to maximize productivity, favoring Deere in this space.

However, the current U.S. drought has affected the production of corn and soybean. This may also hinder Deere’s performance in the third quarter.   

Our long-term Neutral recommendation on Deere is in agreement with a short-term Zacks #3 Rank (Hold).

Please login to Zacks.com or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research

Close

Are you a new Zacks Member or a visitor to Zacks.com?

Top Zacks Features

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Zacks.com. Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
SOUTHWEST A… LUV 31.91 +2.14%
PLANAR SYST… PLNR 4.30 +1.90%
MALLINCKROD… MNK 72.16 +1.75%
CHINA BIOLO… CBPO 47.13 +1.62%
GILEAD SCIE… GILD 103.56 +1.26%