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Deere
stocks fell on Friday, although the agricultural equipment maker exceeded third-quarter earnings tax forecasts and raised its full-year earnings forecast.
Shares of Deere (ticker: DE) fell 2.1% during the morning trading. He
S&P 500
i
Dow Jones industrial average
they increased by 0.6% and 0.5%, respectively.
The company reported earnings per share of $ 5.32, up from $ 10.4 billion in equipment sales, exceeding expectations of $ 4.58 per share and $ 10.3 billion in sales. Estimates were according to Bloomberg and FactSet.
It is now estimated that net income for fiscal year 2021 will be approximately $ 5.8 billion, compared to the previous orientation of $ 5.5 billion. The $ 300 million profit increase is slightly more than the more than $ 200 million third-quarter net profit exceeded projections.
Baird analyst Mid-Double considered the quarter to be a solid pace and noted that Deere was buying its joint venture with Hitatchi. This is another example of the company’s investment in construction markets. Deere bought the Wirgen paver in 2017.
Citigroup analyst Timothy Thein noted that strong prices helped profit margins.
Bernstein analyst Chad Dillard also noted better-than-expected profit margins in his Friday earnings report. There doesn’t seem to be much to complain about.
Double values the purchase of Deere shares and is priced at $ 425. Thein values Hold shares and has a target price of $ 415. Dillard values Hold shares, too; its target price is $ 366 per share.
However, stocks may not rise further, as only a quarter of the 2021 fiscal quarter remains for Deere, and investors – at this point – are more interested in what will happen in 2022. However, the company demonstrated advances in improving profit margins.
Agriculture-related sales reached $ 4.3 billion, 29% more than the previous year. Operating profit grew by 50% year-on-year.
Construction-related sales reached $ 3 billion, up 38 percent year-over-year. The operating profit of this division grew by 126% year-on-year.
Deere’s financial service net income reached $ 227 in the quarter, up 24% from the previous year.
“Our strong results, driven by basically all product categories, are a testament to the exceptional efforts of our employees and distributors,” CEO John May said in a statement.
The company will discuss the results at a conference call in the morning.
Deere shares rose 33% in 2021 and have risen 88% in the last twelve months. The S&P increases by approximately 17% and 30% over comparable periods.
Deere shares are trading at about 17.6 times the 12-month earnings forecast. The S&P is quoted at about 20.8 times that number.
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