Stock to watch: Deere & Company (NYSE: DE)

Deere & Company (NYSE: DE) has reported that their adjusted earnings per share fell 24 percent to $0.61 in the first quarter 2017 ended 31st December.  The stock fell 0.4% this morning (as of 10:40 AM EST February 17th, 2017; Source: Google finance).

Deere & Company had reported the adjusted revenue fall of 1.5 percent to $4.7 billion in the first quarter 2017, beating the analysts’ estimates for revenue of $4.59 billion. DE has included the price realization of 2 percent, as well as favorable currency-translation effects of 1 percent. Further, DE’s equipment net sales in the United States and Canada fell 8 percent in the period, while outside the U.S. and Canada, the net sales grew 11 percent.

During the fourth quarter of 2016, Deere & Company had announced the voluntary employee-separation programs in the U.S. as part of an effort to reduce operating costs. The total pretax expenses related to the programs are estimated to be $111 million. Of this amount, $11 million was recorded in the fourth quarter of 2016, $94 million was recorded in first-quarter 2017, and $6 million is to be recognized over the remainder of the year. The savings from the separation programs are expected to be approximate $70 million in 2017. DE expects to deliver at least $500 million of structural cost reductions by the end of 2018.

Deere & Company in the second quarter of 2017 expects the revenues growth of 1 percent from the year-ago period to approximately $7.18 billion, well ahead of the analysts’ current outlook of $6.89 billion. For the full year 2017, DE has upgraded its revenue outlook substantially. The company now expects 4 percent revenue growth to around $24.32 billion, up from a prior 1 percent growth estimate. However, the analysts are looking for lower sales of $23.12 billion of the year.

Additionally,  Deere & Company equipment sales are expected to increase about 4 percent for fiscal 2017 and be up about 1 percent for the second quarter compared with the same periods of 2016. The foreign-currency rates are not expected to have a material translation effect on equipment sales for the year or second quarter. The net income attributable to Deere & Company is expected to be about $1.5 billion

Deere & Company stock has risen 39.48% in a year (source: Google Finance).

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