Deere Increases Sales but Misses Estimates on Earnings

Deere (NYSE: DE  ) reported earnings on Nov. 21. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended Oct. 31 (Q4), Deere beat expectations on revenues and missed estimates on earnings per share.

Compared to the prior-year quarter, revenue grew and GAAP earnings per share grew.

Margins dropped across the board.

Revenue details
Deere reported revenue of $9.05 billion. The 13 analysts polled by S&P Capital IQ predicted revenue of $8.85 billion on the same basis. GAAP reported sales were 14% higher than the prior-year quarter's $8.61 billion.

Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.

EPS details
EPS came in at $1.75. The 18 earnings estimates compiled by S&P Capital IQ averaged $1.88 per share. GAAP EPS of $1.75 for Q4 were 8.0% higher than the prior-year quarter's $1.62 per share.

Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.

Margin details
For the quarter, gross margin was 28.1%, 100 basis points worse than the prior-year quarter. Operating margin was 11.5%, 30 basis points worse than the prior-year quarter. Net margin was 7.0%, 80 basis points worse than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $6.70 billion. On the bottom line, the average EPS estimate is $1.38.

Next year's average estimate for revenue is $35.21 billion. The average EPS estimate is $8.32.

Investor sentiment
The stock has a four-star rating (out of five) at Motley Fool CAPS, with 2,723 members out of 2,851 rating the stock outperform, and 128 members rating it underperform. Among 652 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 628 give Deere a green thumbs-up, and 24 give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Deere is outperform, with an average price target of $87.42.

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Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor of Motley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. The Motley Fool has no positions in the stocks mentioned above. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.


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  • Report this Comment On November 26, 2012, at 1:30 PM, RetiredInvesta wrote:

    Deere is on a roll - I am regularly increasing my position in them (as is Warren Buffet). Once again, the analysts polled by S&P Capital IQ have missed the EPS. This author continues to use these analysts despite their bad track record.

  • Report this Comment On November 26, 2012, at 8:28 PM, DividendDude wrote:

    Deere & Co. has finally reported higher sales than expected, so this is an excellent stock to own going forward. I, too, don't put much faith in what the analysts from S&P Capital IQ have to say.

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