Deere reported first quarter 2014 earnings of $1.81 per share, up
10% year over year. Quarterly sales increased 3% to $7.6 billion.
Deere expects equipment sales to decrease around 2% year over year
for the second quarter of fiscal 2014 and to decline 3% in fiscal
2014. Even though net farm income remains at high levels, farmer
sentiment regarding capital goods purchases is becoming more
conservative due to lower commodity prices. Deere will nevertheless
benefit from recovery in construction sector and investment in
Brazil. Furthermore, given its strong balance sheet, the company
can continue to increase dividends and repurchase shares. Thus, we
reiterate our Neutral recommendation on Deere with a target price
Founded in 1837, Ill-based Deere & Co., is engaged in the
production and distribution of agricultural and forestry equipment,
construction equipment and engines worldwide. The company sells
products in the U.S. and Canada through branch offices as well as
through distributors and dealers for the resale of products
internationally. Deere & Co.'s credit subsidiary, John Deere
Capital Corporation (JDCC) is one of the largest equipment finance
companies in the U.S. with more than 2.4 million accounts. Deere
currently reports operating results under three major business
Agriculture and turf segment (Approximately 77% of total revenue
in the fiscal 2013) manufactures and distributes a full line of
farm equipment and related service parts including tractors,
sugarcane harvesters, sprayers, irrigation equipment, and more.
Moreover, it manufactures and distributes equipment, products and
service parts for commercial and residential use, which includes
tractors for lawn, garden mowing equipment, golf course equipment,
Construction and forestry division (16%) manufactures,
distributes to dealers and sells at retail a broad range of
machines and service parts used in construction, earthmoving,
material handling and timber harvesting. The products and services
produced by this segment are marketed primarily through independent
retail dealer networks and major retail outlets.
The Financial Services (6%) primarily finances sales and leases
by John Deere dealers for new and used agricultural, commercial and
consumer, and construction and forestry equipment. It provides
wholesale financing to dealers of the above equipments. It also
provides operating loans, offers certain crop risk mitigation
products and invests in wind energy generation.
In addition, other revenues (Approximately 1% of total revenue
in fiscal 2013) primarily constitute of the Equipment Operations'
revenues for finance and interest income, and other income, net of
certain inter-company eliminations.
Deere & Company (DE): Read the Full Research
DEERE & CO (DE): Free Stock Analysis Report
To read this article on Zacks.com click here.