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Deere (DE) 1Q Earnings Jump 22 Pct, Beat Estimates; Shares Rise

 February 13, 2013 09:11 AM

(By Balaseshan) Deere & Co. (NYSE: DE) reported a 22% jump in quarterly earnings on higher sales of agriculture machines and equipment operations. Results exceeded Street's expectations, sending its shares up 4.50% in premarket.

Earnings for the first quarter were $649.7 million or $1.65 per share, up from $532.9 million or $1.30 per share last year.

Worldwide net sales and revenues grew 10% to $7.42 billion. Net sales of the equipment operations climbed 11% to $6.79 billion. Sales included price increases of 3% and an unfavorable currency-translation effect of 1%.

Analysts, on average, polled by Thomson Reuters had expected a profit of $1.40 per share on revenue of $6.72 billion for the first quarter.

[Related -Deere & Company (DE) Q3 Earnings Preview: Nothing Runs Backwards Like A Deere]

Equipment net sales in the United States and Canada jumped 18%, while sales outside the U.S. and Canada rose 2% for the quarter with unfavorable currency-translation effects of 3%.

Agriculture & Turf sales grew 16%, largely due to higher shipment volumes and price realization, partially offset by the unfavorable effects of currency translation. Construction and forestry sales decreased 7% mainly due to lower shipment volumes, higher production costs, an unfavorable product mix, and an increase in expenses.

Looking ahead into the fiscal 2013, Deere expects earnings from financial services of about $540 million. Deere's worldwide sales of agriculture and turf equipment are forecast to increase by about 6%. Industry sales for agricultural machinery in the U.S. and Canada are forecast to be about flat to up 5% for 2013 in relation to the prior year's healthy levels.

[Related -Deere & Company (DE): Short-Term Risks, Long-Term Opportunities]

U.S. and Canada industry sales of turf and utility equipment are expected to be flat for 2013, reflecting a continuation of cautious consumer sentiment. Deere's sales are expected to increase more than the industry due to the impact of new products.

Deere's worldwide sales of construction and forestry equipment are forecast to increase by about 3% for 2013, reflecting a cautious outlook for U.S. economic growth, higher international sales of construction equipment, and flat sales in world forestry markets. In the forestry sector, further weakness in European markets is expected to offset higher U.S. demand.

DE closed Tuesday's regular session up 0.79% at $93.97. The stock has been trading between $69.51 and $95.60 for the past 52 weeks.



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