Deere & Co (DE) – Get Free Report posted stronger-than-expected fourth quarter earnings Wednesday, but forecast disappointing full-year profits in an echo of slowing international demand indicated by its larger rival Caterpillar (CAT) – Get Free Report late last month.
Deere said earnings for the three months ended in October came in at $8.26 per share, an 11% increase from the same period last year and well ahead of the Street consensus forecast of $7.47 per share.
Group worldwide sales, Deere said slipped 1% from last year to $15.41 billion, but that tally topped analysts’ estimates of a $13.58 billion tally.
Looking into its coming fiscal year, Deere said it estimates net income of between $7.75 billion and $8.25 billion, well shy of the LSEG forecast of around $9.33 billion.
“Deere’s fourth-quarter and full-year results can be attributed to the successful execution of our Smart Industrial Operating Model and the value that customers recognize in our industry-leading products and solutions,” said CEO John May. “We must also recognize and credit our dedicated employees, dealers, and suppliers, whose hard work and focus have been instrumental to our overall success.”
Deere shares were marked 7.2% lower in pre-market trading immediately following the earnings release to indicate a Wednesday opening bell price of $355.95 each, a move that would erase all of the stock’s gains for the past six months.
Late last month, larger rival Caterpillar noted ongoing weakness in China, as well as a shrinking order book, that offset solid September quarter earnings.
“As we have mentioned during previous earnings calls, we anticipate continued weakness in China, and expect it to remain well below our typical range of 5% to 10% of enterprise sales,” CEO Jim Umpleby told investors on October 31. “In EAME, we anticipate the region will be slightly down as weakness continues in Europe, partially offset by continuing strong construction demand in the Middle East. Construction activity in Latin America is expected to be about flat versus strong 2022 performance.”
Get investment guidance from trusted portfolio managers without the management fees. Sign up for Action Alerts PLUS now.
