Deere & Company (NYSE: DE) stock rose 2.43% on November 21st, 2018 and continued their bullish momentum in today’s pre-market session as well driven by their fourth quarter of 2018 update. For the full year, net sales in revenues were up 26%, to $37.358 billion, while net sales for equipment operations were up 29% to $33.351 billion. Net income attributable to Deere & Company was $2.368 billion or $7.24 per diluted share. The results for the year included an unfavorable net adjustment to provisional income taxes of $704 million; excluding this item adjusted net income was $3.073 billion.
DE in the fourth quarter of FY 18 has reported the adjusted earnings per share of $2.30, missing the analysts’ estimates for the adjusted earnings per share of $2.44, as per FactSet consensus. The company had reported the adjusted revenue growth of 17 percent to $9.42 billion in the fourth quarter of FY 18, missing the analysts’ estimates for revenue of $9.59 billion. This is due to 3% growth in agriculture and turf sales to $5.61 billion missed the FactSet consensus of $5.71 billion and the 65% increase in construction and forestry sales to $2.74 billion was below expectations of $2.79 billion.
Total worldwide equipment operations net sales were up 18% to $8.3 billion; price realization in the quarter was positive by 2 points. Currency translation was negative by 3 points. The impact of Wirtgen was 11 points. Agriculture & Turf net sales were up 3% in the quarter-over-quarter comparison primarily driven by higher shipment volumes and price realization partially offset by the negative impact of currency. Operating profit was $567 million down 5% from the same quarter last year as the benefit of increased volumes and price realization were balanced by higher production cost, currency headwinds and increased R&D expense. Operating margins for the quarter were 10.1%.
Moreover, for the EU 28, the industry outlook is forecast to be flat in 2019; our strength in the U.K. and France is offsetting weather-related challenges in northern Germany and Scandinavia. In South America, industry sales of tractors and combines are projected to be flat to up 5% for the year. This is primarily driven by solid industry fundamentals in Brazil which is benefiting from a positive reaction to the political election, commodity price premiums and expanding acreage opportunities. However, growth in Argentina is likely to remain challenged in the near-term as the country battles high inflation and political uncertainty.
For fiscal 2019, Deere expects agriculture and turf sales to rise about 3%, while the current FactSet consensus of $25.01 billion implies a 7.8% increase; the company expects construction and forestry sales to rise 15%, while current expectations of $10.57 billion implies 4.0% growth.