Deere & Company
) announced that it will invest $58 million to enhance operations
at Moline, Illinois seeding plant, which is currently engaged in
the manufacturing of planting equipment.
The plant manufactured its first planting equipment in 1877
and has been operational since 1879. The plant currently employs
around 800 people. However, the investment will not have a
material impact on total employment. The investment is in
addition to a new factory master plan aimed at increasing
efficiency and quality. Improvement will come in the form of a
new paint system and increased usage of automation and
Deere's fourth quarter fiscal 2012 earnings came in at $1.75
per share compared with $1.62 per share in the prior-year
quarter. Deere's worldwide total sales increased 14% year over
year to $9.79 billion, beating the Zacks Consensus Estimate of
The Agriculture & Turf segment's sales increased 16% to
$7.39 billion, attributable to higher shipment volumes and
improved price realization, partially offset by a negative
currency translation. Operating profit of the segment improved 7%
to $931 million, attributable to higher shipment and improved
price realization, partially offset by unfavorable effects of
foreign currency exchange.
Deere expects equipment sales to grow around 10% in the first
quarter of fiscal 2013 and 5% for the full year. Net income is
projected at $3.2 billion for fiscal 2013. Segment wise, Deere
expects worldwide sales of Agriculture and Turf equipment to grow
4% in fiscal 2013. Higher commodity prices and strong farm
incomes are expected boost demand for farm machinery during the
year. Furthermore, Deere's sales are expected to benefit from
global expansion and lines of advanced new equipment.
Region wise, Deere expects industry farm-machinery sales in
the U.S. and Canada to remain flat year over year in 2013. In
Europe, sales are projected to be down 5% due to continuing
deterioration in the overall economy. Sales in the Commonwealth
of Independent States are expected to witness modest growth.
The company has invested to expand its presence in both
domestic and international market, and has been building capacity
in China, India, and Brazil and continuously launched new
products. Given the increased global demand for food, shelter and
infrastructure, we believe that the long-term outlook for Deere
Furthermore, recent figures reveal that U.S. residential
construction is finally stabilizing and is on the road to a
much-awaited recovery. This, in turn, will improve demand for
Deere's construction equipment going forward. However, continued
weakness in the European markets remains a concern.
Deere retains a Zacks #3 Rank (short-term Hold rating).
Illinois-based Deere, 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 competes with companies like
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