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Deere (DE) to Report Q4 Earnings: What's in the Cards?
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Deere & Company (DE - Free Report) is slated to announce fourth-quarter fiscal 2016 results on Nov 23, before the opening bell. Last quarter, Deere’s earnings edged up 1.4% while sales fell 14% year over year.
Let’s see how things are shaping up prior to this announcement.
Factors At Play
Deere projects total equipment sales to decline 10% year over year in fiscal 2016. For fourth-quarter fiscal 2016, sales are likely to deteriorate about 8% from the year-ago quarter. The projection includes a negative currency translation effect of about 2% for the full year and a positive translation effect of about 1% for the fourth quarter. Market demand for construction equipment continues to soften. Further, a weak oil and gas sector, with the impact most pronounced in the energy-producing regions of the U.S. and Canada will impact Deere's results.
For fiscal 2016, the company anticipates net income to be about $1.35 billion. For 2016, Deere projects price realization of about 1 point, favorable raw material costs, lower pension and OPEB expense, and lower incentive compensation expense. Moreover, research and development expenses will be down about 1%. Additionally, the company anticipates selling, administrative and general expense to be down about 5% for the full year. This is likely to contribute to margin expansion.
Earnings Whispers
Our proven model does not conclusively show that Deere will beat estimates this quarter. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) to be able to beat consensus estimate. But that is not the case here as you will see below.
Zacks ESP: Earnings ESP, which represents the difference between the Most Accurate estimate and the Zacks Consensus Estimate is 0.00% for Deere. This is because both the Most Accurate and the Zacks Consensus Estimate are pegged at 36 cents. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter.
Zacks Rank: Deere has a Zacks Rank #2. Though a Zacks Rank #2 increases the predictive power of ESP, an ESP of 0.00% makes surprise prediction difficult.
We caution against Sell-rated stocks (Zacks Ranks #4 and 5) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Surprise History
Deere has outpaced the Zacks Consensus Estimate in each of the trailing four quarters, with an average earnings beat of 32.16%.
Advanced Accelerator Applications S.A. has an Earnings ESP of +55.56% and also sports a Zacks Rank #1.
Sanderson Farms, Inc. has an Earnings ESP of +4.48% and flaunts a Zacks Rank #1.
Zacks' Top Investment Ideas for Long-Term Profit
How would you like to see our best recommendations to help you find today’s most promising long-term stocks? Starting now, you can look inside our portfolios featuring stocks under $10, income stocks, value investments and more. These picks, which have double and triple-digit profit potential, are rarely available to the public. But you can see them now. Click here >>
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Deere (DE) to Report Q4 Earnings: What's in the Cards?
Deere & Company (DE - Free Report) is slated to announce fourth-quarter fiscal 2016 results on Nov 23, before the opening bell. Last quarter, Deere’s earnings edged up 1.4% while sales fell 14% year over year.
Let’s see how things are shaping up prior to this announcement.
Factors At Play
Deere projects total equipment sales to decline 10% year over year in fiscal 2016. For fourth-quarter fiscal 2016, sales are likely to deteriorate about 8% from the year-ago quarter. The projection includes a negative currency translation effect of about 2% for the full year and a positive translation effect of about 1% for the fourth quarter. Market demand for construction equipment continues to soften. Further, a weak oil and gas sector, with the impact most pronounced in the energy-producing regions of the U.S. and Canada will impact Deere's results.
For fiscal 2016, the company anticipates net income to be about $1.35 billion. For 2016, Deere projects price realization of about 1 point, favorable raw material costs, lower pension and OPEB expense, and lower incentive compensation expense. Moreover, research and development expenses will be down about 1%. Additionally, the company anticipates selling, administrative and general expense to be down about 5% for the full year. This is likely to contribute to margin expansion.
Earnings Whispers
Our proven model does not conclusively show that Deere will beat estimates this quarter. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) to be able to beat consensus estimate. But that is not the case here as you will see below.
Zacks ESP: Earnings ESP, which represents the difference between the Most Accurate estimate and the Zacks Consensus Estimate is 0.00% for Deere. This is because both the Most Accurate and the Zacks Consensus Estimate are pegged at 36 cents. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter.
Zacks Rank: Deere has a Zacks Rank #2. Though a Zacks Rank #2 increases the predictive power of ESP, an ESP of 0.00% makes surprise prediction difficult.
We caution against Sell-rated stocks (Zacks Ranks #4 and 5) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Surprise History
Deere has outpaced the Zacks Consensus Estimate in each of the trailing four quarters, with an average earnings beat of 32.16%.
DEERE & CO Price and EPS Surprise
DEERE & CO Price and EPS Surprise | DEERE & CO Quote
Stocks That Warrant a Look
Here are some stocks worth considering as our model shows that they have the right combination of elements to post an earnings beat this quarter.
Vail Resorts Inc. (MTN - Free Report) has an Earnings ESP of +4.46% and sports a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
Advanced Accelerator Applications S.A. has an Earnings ESP of +55.56% and also sports a Zacks Rank #1.
Sanderson Farms, Inc. has an Earnings ESP of +4.48% and flaunts a Zacks Rank #1.
Zacks' Top Investment Ideas for Long-Term Profit
How would you like to see our best recommendations to help you find today’s most promising long-term stocks? Starting now, you can look inside our portfolios featuring stocks under $10, income stocks, value investments and more. These picks, which have double and triple-digit profit potential, are rarely available to the public. But you can see them now. Click here >>