Deere Bags a Terrific Quarter

I hate to do this, Fools, but the basketball season is young, and I'm not. So I'll take my slam dunks where I can find them: It really does appear that nothing runs like a Deere (NYSE: DE).

That, at least, would be logical takeaway from the company's most recent results for Q4 2007. The company's 52% jump in earnings, from $277.3 million to $422.1 million, handily topped expectations, especially since it translated into EPS of $1.88 in the most recent quarter. That sum far exceeded the $1.55 the dart-throwers had apparently expected.

Basically, the quarter saw Deere's several strengths handily overcoming its sole weakness. Net sales for the agricultural equipment and commercial and consumer sectors both jumped by 35%, while credit revenues also rose by double digits. Only the construction and forestry unit saw its revenue slide, on the basis of the weak U.S. housing market.

Geography was all-important in Q4. Deere's net sales in the United States and Canada rose a solid 15%, as strong agricultural equipment sales more than balanced the aforementioned construction and forestry equipment softness. However, equipment sales growth in other parts of the world more than doubled the U.S./Canada rate.

Deere retains its spot among a steadily expanding list of big U.S.-based companies that have latched onto international growth to overcome slower expansion -- or backsliding -- at home. That disparate bunch includes fellow equipment manufacturer Caterpillar (NYSE: CAT), big aluminum producer Alcoa (NYSE: AA), and the world's two biggest delivery companies, FedEx (NYSE: FDX) and United Parcel Service (NYSE: UPS).

In Deere's case, I'm especially attracted to the company's ability to wring growth from a still-strong domestic agriculture picture, and combine it with across-the-board increases overseas. But then, I'm no smarter than the market in that connection, since Deere's shares added nearly 5% on Wednesday in the face of a pre-Thanksgiving bake-off for the broad markets.

With management forecasting continued strength for the current quarter and the newly begun fiscal 2008, my Foolish friends know what to do with this stock.

For related Foolishness:

• Deere in the Driver's Seat
• Caterpillar Is Still a Butterfly
• Cemex: Still Solid