Deere & Company (NYSE: DE) stock rose over 0.1% in the after-hours session of November 25th, 2020 (Source: Google finance) after the company posted better than expected results for the fourth quarter of FY 20. The company for the quarter reported the net income attributable of $757 million. Agriculture & Turf net sales had risen 8% compared to the fourth quarter last year mainly due to price realization and higher shipment volumes. The segment posted operating profit of $860 million resulting in a 13.9% operating margin. In the US, there has been improvement in the farmer sentiment during the quarter as the combination of government support and improved commodity prices boosted farm income prospects for the year. During the quarter, Construction & Forestry net sales was of $2.461 billion were down 16% mainly due to lower shipment volumes and the operating profit was lower year-over-year to $196 million due to lower sales volumes.
DE in the fourth quarter of FY 20 has reported the adjusted earnings per share of $2.39, beating the analysts’ estimates for the adjusted earnings per share of $1.44, according to the Zacks Consensus Estimate. The company had reported 2 percent fall in the adjusted revenue to $8.66 billion in the fourth quarter of FY 20, beating the analysts’ estimates for revenue of $7.30 billion.
For Agriculture & Turf segment in 2021, the company expects in the US and Canada, Ag industry sales to be up between 5% to 10%. The increase year-over-year will be due to improved fundamentals in the Ag sector as well as the historically low inventory levels at the start of the year. In Europe, the industry is expected to be flat to up 5% with strength in arable offsetting some weakness in dairy and livestock. In South America, the company expects an industry sales grow by about 5% with solid visibility into the first half of the year, especially in Brazil. Industry sales in Asia are expected to be down slightly. Overall, for fiscal 2021, the sales of worldwide Ag & Turf equipment are forecast to be up between 10% and 15%
In addition, 2021 Construction Equipment industry sales in the US and Canada are projected to be down about 5% due to continued uncertainty expected in the oil & gas and non-residential sectors. Deere’s Construction & Forestry 2021 net sales are projected to be up between 5% and 10% compared to last year.