Deere To Report Q4 Earnings: What's In Store?

Deere & Company (DE - Free Report) is scheduled to report fourth-quarter fiscal 2022 results on Nov 23, before the opening bell.


Which Way Are the Estimates Trending?

The Zacks Consensus Estimate for Deere’s earnings per share is pegged at $7.09 for the fiscal fourth quarter, suggesting growth of 72% year over year. The Zacks Consensus Estimate for total revenues is pinned at $13.5 billion, calling for a year-over-year increase of 31.2%. Earnings estimates for the fiscal fourth quarter have remained unchanged in the past 30 days.


Q3 Results

Deere’s sales surpassed the Zacks Consensus Estimate in the last reported quarter, while earnings missed the same. Both the bottom and the top line increased year over year. On average, the company has a trailing four-quarter earnings surprise of 7.8%.

Deere & Company Price and EPS Surprise

Deere & Company Price and EPS Surprise

Deere & Company price-eps-surprise | Deere & Company Quote


What Does Our Model Indicate?

Our proven model doesn’t conclusively predict an earnings beat for Deere this season. 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. But that’s not the case here.

You can uncover the best stocks before they’re reported with our Earnings ESP Filter.
 
Earnings ESP: The Earnings ESP for Deere is -3.28%.

Zacks Rank: Deere currently carries a Zacks Rank of 3.


Key Factors to Consider

Deere expects net income for fiscal 2022 to be between $7.0 billion and $7.2 billion. The company reported net income of $5.96 billion in fiscal 2021. Favorable farm fundamentals have prompted farmers to boost spending on new agricultural equipment and replace the old ones. The preference for Deere’s products for their advanced technologies and features will likely reflect on fiscal fourth-quarter revenues
 
Factors such as supply-chain issues, high production costs, selling, administrative, and general expenses, research and development expenses, and the unfavorable effects of foreign currency exchange are likely to have impacted the company’s margin in the quarter. Nevertheless, favorable price realization and higher shipment volumes/sales mix are expected to have negated some of these headwinds, as seen in the fiscal third quarter.


Segment Estimates

The Zacks Consensus Estimate for Production & Precision Agriculture segment’s revenues is pegged at $6,546 million for the fiscal fourth quarter, suggesting a year-over-year increase of 40%. Sales will be aided by higher shipment volumes and price realization. The Zacks Consensus Estimate for the segment’s operating profit is pegged at $1,682 million, up 116% from $777 million in the last year’s comparable quarter.

The Zacks Consensus Estimate for the Small Agriculture & Turf segment’s revenues is pegged at $3,604 million for the fiscal fourth quarter, indicating28% growth from the prior-year quarter. The segment’s operating profit is estimated at $511 million, up 77% year over year.

Favorable farm fundamentals are expected to have led to improvement in orders which is likely to reflect in the segment’s top-line performance. However, the segment will likely have been impacted by supply constraints in the fiscal fourth quarter.
 
The Construction & Forestry segment’s sales are estimated at $3,311 million in the fiscal fourth quarter, up 18% from the prior-year quarter on strong demand. The segment’s operating profit is expected to soar 55% to $418 million from the prior-year quarter.
 
The Zacks Consensus Estimate for the Financial Services segment’s revenues is pegged at $967 million for the fiscal fourth quarter, up 3% from the year-ago quarter’s tally. The Zacks Consensus Estimate for the segment’s operating profit is pegged at $301 million compared with the prior-year quarter’s reported figure of $299 million.


Price Performance

Zacks Investment Research

Image Source: Zacks Investment Research

Deere’s shares have increased 18.7% in the past year compared with the industry’s gain of 16.3%.


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