Deere & Company (NYSE:DE) in the fourth quarter FY 16 has reported the revenue of $6.52 billion beating the consensus estimate of $5.35 billion by the analysts. As a result, DE stock made a gap up opening today and rose over 10.1% on November 23rd, 2016 (as of 10:06AM EST; Source:Google finance).
Moreover, in the fourth quarter DE has posted the earnings per share of $0.90, beating the analyst estimate of $0.36. In the fourth quarter of FY 16, DE has reported the net income of $285.3 million compared with $351.2 million in Q4 FY 15. The revenue in the Q4 decreased 3% to $6.520 billion mainly due to the 5% fall in the net sales of the equipment operations of $5.650 billion for the quarter against corresponding quarter FY 15 of $5.932 billion. Additionally, the Sales included price realization of 3 percent for the fourth quarter and a favorable currency-translation effect of 1 percent for the quarter. The net sales of equipment in the United States and Canada decreased 14 percent for the quarter. However, outside the U.S. and Canada, the net sales grew 11 percent for the fourth quarter.
DE’s equipment operations has reported an operating profit of $354 million for the quarter, up from $335 million in Q4 FY15. The growth for the quarter is due to the price realization, which has partially offset by lower shipment volumes, an impairment charge for international construction and forestry operations, and higher production costs. On the other hand, the net income of DE’s equipment operations was $185 million for the fourth quarter compared with $200 million for the corresponding period in 2015 due to increase in tax rate in 2016. Additionally, the financial services segment reported the fall in the net income of $109.8 million for the quarter compared with $153.0 million in Q4 FY15 due to less-favorable financing spreads, higher losses on lease residual values and a higher provision for credit losses.
For the FY 16, the net income fall to $1.524 billion compared with $1.940 billion in FY15 and the net sales fall 8% to $26.644 billion due to the global farm recession and weak construction-equipment markets. DE expects the sales to continue lagging because of the weak market for equipment.
Meanwhile, the net sales and revenues are projected to fall about 1 percent for FY17 to about $23.86 billion), while net income attributable to DE is expected to be about $1.4 billion. This is above the analysts’ expectation of $1.2 billion of net income and $22.72 billion of revenue for FY17. Moreover, the equipment sales are forecasted to decrease about 1 percent for FY17.
DE stock has rose 32.6% in this year to date (as of 10:00AM EST in November 23rd, 2016; source: Google Finance).