Financial reports second-quarter earnings that beat Wall Street expectations. Full-year earnings guidelines were also raised. Share prices fell on Friday.
Deere (Ticker: DE) reported earnings of $ 6.81 per share from 13.4 billion in sales. Wall Street was looking for an EPS of 69 6.69 from about $ 13.2 billion in sales. A year ago, Deere earned $ 5.68 per share from লার 12 billion in sales.
In pre-market trading, Dir’s shares fell 4.8% to about 7 347.
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Futures rose about 1.2% and 0.9%, respectively. Coming on Friday trading, Deere stock has risen about 6% this year.
It looks like a solid earnings report. For example, prices in Deere’s agriculture department have risen 13% year-over-year. Operating profit margins in the segment, however, have declined by about 2 percentage points to about 20%. Even so, the overall profit margin in Deere’s machinery division – which includes construction and small farm equipment – grew by about 0.4% year-on-year.
The stock may have gone down as investors always expected good news from Deere. Quarterly results now beat Wall Street bottom line estimates for 11 consecutive quarters. It goes back to mid-2019 before the epidemic. This is not bad for a company that is more affected by the price of the product than most.
Looking ahead, the full-year earnings guidance appears to have increased by about $ 100 million on a comparative basis. Deere now expects to earn about $ 7.2 billion in its fiscal year. The outlook given in the first quarter earnings report calls for $ 6.9 billion in net income. The new figure, however, appears to include a $ 220 gain. Wall Street has projected about $ 7 billion in net income for Deer’s fiscal year.
Deere’s lending unit earnings are expected to decline slightly in 2022 due to higher provisions for credit losses and higher costs. That’s one negative from the income report.
Management Eastern hosts an income conference call at 10am. Investors will want to hear more about inflation and its impact on farmers, as well as Deere’s profit margins.
The price of farm inputs like fertilizer has gone up and so will the price of Deere to offset rising costs. This makes it more difficult for farmers. Yet the prices of wheat, corn, and soybeans – the products that make up sales for farmers – are even stronger, about 57%, 32% and 25% year-over-year, respectively.
Alternative markets mean that the stock will move about 7%, up or down, after earnings. This will be more than the recent quarter. Deere stock has moved up or down about 3% on average over the past four quarterly reports.
Earnings have lost analysts’ estimates in each of the last four reports. The share price has risen twice and fallen twice.
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