Deere Tops Third Quarter Earnings Expectations; Issues Positive Forecast

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Last Update: 17-Aug-11 11:35 ET

Deere (DE $74.58 -0.58) reported third quarter earnings of $1.69 per share, $0.02 better than the Capital IQ Consensus Estimate of $1.67.

Revenues rose 24.1% year/year to $7.72 billion versus the $7.54 billion consensus.

Net sales of the worldwide equipment operations increased 24% for the quarter and 27% for nine months compared with a year ago. Sales included a favorable currency-translation effect of 6% for the quarter and 4% for nine months and price increases of 3% for both periods. Equipment net sales in the United States and Canada increased 10% for the quarter and 19% year to date. Outside the U.S. and Canada, net sales were up 49% for the quarter and 40% for nine months, with favorable currency-translation effects of 16% and 8%, respectively.

For the fourth quarter, the company expects to see revenues climb ~20% YoY, which equates to ~$7.88 billion versus the $7.51 billion Capital IQ Consensus Estimate. Separately, the company raised its revenues expectations to up ~25% YoY, which calculates to ~$29.47 billion from up ~21-23%, versus the $29.09 billion Capital IQ Consensus Estimate.

Included is a favorable currency-translation impact of about 4% for both periods. FY11 net income is anticipated to be ~$2.7 billion, up from ~$2.65 billion previously. Reflecting improvement from the co's previous estimate, the annual forecast now includes a negative impact of ~$70 million in sales and $10 million in operating profit from the effects of the Japanese earthquake and tsunami earlier this year.