Deere & Company DE is scheduled to report fourth-quarter fiscal 2024 results on Nov. 21 before the opening bell.
The Zacks Consensus Estimate for earnings has moved down 2% over the past 60 days to $3.90 per share. The consensus mark implies a 52.8% plunge from the year-ago actual. The consensus estimate for revenues is pegged at $9.3 billion, indicating a 32.3% year-over-year decline.
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Find the latest EPS estimates and surprises on Zacks Earnings Calendar.
DE’s Earnings Surprise History
Deere’s earnings beat the Zacks Consensus Estimates in the trailing four quarters, the average surprise being 11.8%.
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What the Zacks Model Predicts for Deere
Our model does not conclusively predict an earnings beat for Deere this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. That is not the case here.
Earnings ESP: The Earnings ESP for Deere is +0.98%. You can uncover the best stocks before they’re reported with our Earnings ESP Filter.
Zacks Rank: Deere currently carries a Zacks Rank #4 (Sell).
Factors Likely to Have Shaped DE’s Q4 Performance
Deere has been facing challenges due to weak farmer spending amid low commodity prices. The company stated that in the wake of challenging conditions in the global agricultural and construction sectors, it would align its production with demand levels. This is likely to have weighed on the company’s fiscal fourth-quarter performance.
High production expenses selling, administrative and general expenses; and research and development expenses are likely to have impacted the company’s margin in the quarter.
Nevertheless, favorable price realization is expected to have negated some of these headwinds, as seen in the fiscal third quarter.
Deere’s Q4 Segmental Projections
Our model predicts the Production & Precision Agriculture segment’s revenues to be $4.03 billion for the fiscal fourth quarter , suggesting a year-over-year decrease of 42.1%. We expect the segment’s operating profit to be $543 million, indicating a 70.4% fall from the prior-year quarter’s reported figure. Gains from price realization are likely to have been somewhat offset by escalated production costs and lower shipment volumes.
Our estimate for the Small Agriculture & Turf segment’s revenues is pegged at $2.11 billion for the fiscal fourth quarter, indicating a 31.7% decline from the prior-year quarter’s actual. The segment’s operating profit is estimated at $147 million, suggesting a 66.9% year-over-year fall. The Small Agriculture & Turf segment’s performance is expected to have been affected by elevated production costs; higher research and development, and selling, general and administrative expenses; and lower shipment volumes, partially offset by price realization.
The Construction & Forestry segment’s sales are estimated to be $6.14 billion for the fiscal fourth quarter, suggesting a 38.9% dip from the prior-year quarter’s reported number on lower volume. We predict the segment’s operating profit to plunge 41.7% year over year to $301 million.
Our estimate for the Financial Services segment’s revenues is pegged at $1.42 billion for the fiscal fourth quarter, indicating a 5.4% rise from the year-ago quarter’s actual. Our projection for the segment’s operating profit is $251 million. The segment reported operating profit of $229 million in the prior-year quarter.
DE’s Price Performance
Shares of Deere have gained 6.5% in the past year compared with the industry’s 5.5% growth.
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Deere’s Peer Performance
AGCO Corporation AGCO delivered adjusted earnings per share of 68 cents in third-quarter 2024, missing the Zacks Consensus Estimate of $1.07. The bottom line fell 83% year over year. Low commodity prices and elevated input costs impacted equipment demand in the quarter.
AGCO’s revenues decreased 24.8% year over year to $2.6 billion in the September-end quarter. The top line missed the Zacks Consensus Estimate of $2.9 billion. Excluding the unfavorable currency-translation impacts of 0.6%, net sales fell 24.2% year over year.
Stocks to Consider
The Gap Inc. GAP, expected to release the third-quarter 2024 results on Nov. 21, currently has an Earnings ESP of +3.05 and a Zacks Rank #2. The company has a trailing four-quarter surprise of 142.8%, on average.
The Zacks Consensus Estimate for GAP’s third-quarter earnings is pegged at 56 cents. You can see the complete list of today’s Zacks #1 Rank stocks here.
American Eagle Outfitters, Inc. AEO, expected to report the third-quarter 2024 results on Dec. 4, currently has an Earnings ESP of +0.15 and a Zacks Rank #3. The company has a trailing four-quarter surprise of 12%, on average.
The Zacks Consensus Estimate for AEO’s earnings for the third quarter is pegged at 46 cents.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
