We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Deere & Company (DE - Free Report) reported second-quarter fiscal 2023 (ended Apr 30) earnings of $9.65 per share, beating the Zacks Consensus Estimate of $8.57. The bottom line increased 42% from the prior-year quarter’s levels. Continued strength in demand despite supply-chain constraints contributed to the bottom line.
Net sales of equipment operations (comprising Agriculture and Turf, Construction and Forestry) were $16,079 million, up 33.6% year over year. Revenues topped the Zacks Consensus Estimate of $14,845 million. Total net sales (including financial services and others) were $17,387 million, up 30% year over year.
Operational Update
The cost of sales in the reported quarter was up 20.3% year over year to $10,730 million. Total gross profit increased 49.5% year over year to $6,657 million. Selling, administrative and general expenses rose 42.7% to $1,330 million from the prior-year period’s levels.
Total operating profit (including financial services) was up 46% year over year to $3,898 million in the fiscal second quarter.
The Production & Precision Agriculture segment’s sales rose 53% year over year to $7,822 million, primarily driven by higher shipment volumes and price realization. Operating profit increased 105% year over year to $2,170 million.
Small Agriculture & Turf sales rose 16% to $4,145 million from the year-earlier quarter’s levels. Segmental sales benefited from price realization and higher shipment volume offset by the unfavorable impact of currency translation. Operating profit rose 63% year over year to $849 million.
Construction & Forestry sales were $4,112 million, up 23% year over year, backed by higher shipment volumes and price realization. Operating profit increased 3% year over year to $838 million.
Net revenues in Deere’s Financial Services division were $28 million in the reported quarter, down 87% year over year. The downside was primarily caused by less-favorable financing spreads and a higher provision for credit losses.
Financial Update
Deere reported cash and cash equivalents of $3,587 million at the end of second-quarter fiscal 2023 compared with $3,878 million recorded at the year-ago quarter’s end. Cash utilized in operating activities was $147 million in the first half of fiscal 2023 compared with $1,762 million in the prior-year period. At the end of the quarter, the long-term borrowing was nearly $36 billion compared with $32 billion in the year-ago quarter’s end.
Guidance
Deere expects net income for fiscal 2023 to be between $9.25 billion and $9.50 billion, up from the previously disclosed guidance of $8.75-$9.25 billion. Favorable farm fundamentals and increased investment in infrastructure will drive demand for DE’s equipment.
Net sales for Production & Precision Agriculture are expected to register growth of 20% in fiscal 2023 from the prior-year quarter’s reported level. Sales of Small Agriculture & Turf are expected to be flat to up 5%. Sales of Construction & Forestry are projected to be up 10-15%.
Price Performance
Deere’s shares have gained 1.6% in the past year compared with the industry’s growth of 0.3%.
Worthington Industries has an average trailing four-quarter earnings surprise of 27.5%. The Zacks Consensus Estimate for WOR’s fiscal 2023 earnings is pegged at $4.93 per share, up 17.7% in the past 60 days. WOR has gained 30.6% in the past year.
Manitowoc has an average trailing four-quarter earnings surprise of 38.8%. The Zacks Consensus Estimate for MTW’s 2023 earnings is pegged at 85 cents per share, up 63.5% in the past 60 days. MTW’s shares have gained 35.2% in the past year.
The Zacks Consensus Estimate for AptarGroup’s 2023 earnings per share is pegged at $4.15, up 8% in the past 60 days. ATR has a trailing four-quarter average earnings surprise of 6.4%. ATR has gained 15% in the last year.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Deere (DE) Q2 Earnings & Revenues Top Estimates, '23 View Raised
Deere & Company (DE - Free Report) reported second-quarter fiscal 2023 (ended Apr 30) earnings of $9.65 per share, beating the Zacks Consensus Estimate of $8.57. The bottom line increased 42% from the prior-year quarter’s levels. Continued strength in demand despite supply-chain constraints contributed to the bottom line.
Net sales of equipment operations (comprising Agriculture and Turf, Construction and Forestry) were $16,079 million, up 33.6% year over year. Revenues topped the Zacks Consensus Estimate of $14,845 million. Total net sales (including financial services and others) were $17,387 million, up 30% year over year.
Operational Update
The cost of sales in the reported quarter was up 20.3% year over year to $10,730 million. Total gross profit increased 49.5% year over year to $6,657 million. Selling, administrative and general expenses rose 42.7% to $1,330 million from the prior-year period’s levels.
Total operating profit (including financial services) was up 46% year over year to $3,898 million in the fiscal second 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 53% year over year to $7,822 million, primarily driven by higher shipment volumes and price realization. Operating profit increased 105% year over year to $2,170 million.
Small Agriculture & Turf sales rose 16% to $4,145 million from the year-earlier quarter’s levels. Segmental sales benefited from price realization and higher shipment volume offset by the unfavorable impact of currency translation. Operating profit rose 63% year over year to $849 million.
Construction & Forestry sales were $4,112 million, up 23% year over year, backed by higher shipment volumes and price realization. Operating profit increased 3% year over year to $838 million.
Net revenues in Deere’s Financial Services division were $28 million in the reported quarter, down 87% year over year. The downside was primarily caused by less-favorable financing spreads and a higher provision for credit losses.
Financial Update
Deere reported cash and cash equivalents of $3,587 million at the end of second-quarter fiscal 2023 compared with $3,878 million recorded at the year-ago quarter’s end. Cash utilized in operating activities was $147 million in the first half of fiscal 2023 compared with $1,762 million in the prior-year period. At the end of the quarter, the long-term borrowing was nearly $36 billion compared with $32 billion in the year-ago quarter’s end.
Guidance
Deere expects net income for fiscal 2023 to be between $9.25 billion and $9.50 billion, up from the previously disclosed guidance of $8.75-$9.25 billion. Favorable farm fundamentals and increased investment in infrastructure will drive demand for DE’s equipment.
Net sales for Production & Precision Agriculture are expected to register growth of 20% in fiscal 2023 from the prior-year quarter’s reported level. Sales of Small Agriculture & Turf are expected to be flat to up 5%. Sales of Construction & Forestry are projected to be up 10-15%.
Price Performance
Deere’s shares have gained 1.6% in the past year compared with the industry’s growth of 0.3%.
Image Source: Zacks Investment Research
Zacks Rank & Stocks to Consider
Deere currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks from the Industrial Products sector are Worthington Industries, Inc. (WOR - Free Report) , The Manitowoc Company, Inc. (MTW - Free Report) and AptarGroup, Inc. (ATR - Free Report) . WOR and MTW flaunt a Zacks Rank #1 (Strong Buy) at present, while ATR has a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Worthington Industries has an average trailing four-quarter earnings surprise of 27.5%. The Zacks Consensus Estimate for WOR’s fiscal 2023 earnings is pegged at $4.93 per share, up 17.7% in the past 60 days. WOR has gained 30.6% in the past year.
Manitowoc has an average trailing four-quarter earnings surprise of 38.8%. The Zacks Consensus Estimate for MTW’s 2023 earnings is pegged at 85 cents per share, up 63.5% in the past 60 days. MTW’s shares have gained 35.2% in the past year.
The Zacks Consensus Estimate for AptarGroup’s 2023 earnings per share is pegged at $4.15, up 8% in the past 60 days. ATR has a trailing four-quarter average earnings surprise of 6.4%. ATR has gained 15% in the last year.