Earnings Cheat Sheet: Is Deere Still Plowing Through the Economy?

Deere & Company (DE) provides agriculture and forestry products worldwide.  The company has been in business since 1837, when a fella named John Deere developed the world’s first commercially successful, self scouring steel plow.  Flash forward to 2010, and you have a company that has seen its share price increase 41% YTD.  Can DE keep its share price increasing and break its 52 week high?

Wednesday, before opening bell, DE released its latest earnings.

Earnings: DE reported $1.07 EPS.  This is a large improvement over last year’s 23 cents per share.  The company earned a profit of $457 million in the latest quarter.

Revenue: Compared to prior year’s quarter, revenue surged 35% to $7.2 billion.

Actual versus Wall Street Expectations: EPS of $1.07 beat analysts estimates of 95 cents per share.  The company has beat estimates every time this year.  Revenue of $7.2 billion also beat analysts estimates of $6.2 billion.

Notable Stats: Deere & Company expects equipment sales to increase 10 to 12 percent for next year.  This is partly due to the release of new equipment models because of more strict pollution regulations around the world.

Did You Hear That? CEO Samuel Allen said, “Deere’s construction equipment sales benefited from somewhat-stronger overall demand but remained far below normal levels.”

Commentary: Deere & Company looks to have a strong future.  The company is in a business where its products will have demand simply because farmers have to feed people.  Shares are trading down slighly less than 1% after the earnings release, but still remain close to its 52-week high of $79.66.

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Disclosure: No position.