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Deere (DE) to Report Q3 Earnings: What's in the Offing?

·5 min read

Deere & Company DE is scheduled to report third-quarter fiscal 2022 results on Aug 19, before the opening bell.

Which Way are the Estimates Trending?

The Zacks Consensus Estimate for Deere’s earnings per share is pegged at $6.62 for the fiscal third quarter, suggesting growth of 24% year over year. The Zacks Consensus Estimate for total revenues is pinned at $12.9 billion for the period, calling for a year-over-year increase of 24.3%. Earnings estimates for the fiscal third quarter have moved up in the past 30 days.

Q2 Results

In the last reported quarter, Deere’s earnings surpassed the Zacks Consensus Estimate, while sales missed the same. Both the bottom and the top line increased year over year. The company has a trailing four-quarter earnings surprise of 14.2%, on average.

Let’s see how things have shaped up prior to this announcement.

Deere & Company Price and EPS Surprise

 

Deere & Company Price and EPS Surprise
Deere & Company Price and EPS Surprise

Deere & Company price-eps-surprise | Deere & Company Quote

 

What Does Our Model Indicate?

Our proven model doesn’t conclusively predict an earnings beat for Deere this season. The combination of a positive Earnings ESP, and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold), increases the chances of an earnings beat. But that’s not the case here.

You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Earnings ESP: The Earnings ESP for Deere is -0.99%.

Zacks Rank: Deere currently carries a Zacks Rank of 3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Key Factors to Consider

Higher agricultural crop prices and pick-up in farm income have prompted farmers to boost spending on new agricultural equipment and replace the age-old ones. The preference for Deere’s products for their advanced technologies and features will likely reflect on fiscal third-quarter revenues.

Cost management and benefits from footprint assessment are likely to have boosted the company’s margin in the to-be-reported quarter. However, rising raw material and logistics costs and uncertainties related to the COVID-19 pandemic might have affected quarterly performance.

Segment Estimates

The Zacks Consensus Estimate for Production & Precision Agriculture segment’s revenues is pegged at $5,760 million for the fiscal third quarter, suggesting a year-over-year increase of 36%. The Zacks Consensus Estimate for the segment’s operating profit is pegged at $1,422 million, up 57% year over year.

Small Agriculture & Turf segment’s Zacks Consensus Estimate for revenues is pegged at $3,678 million for the fiscal third quarter, indicating a 17% growth from the prior-year quarter’s levels. The segment’s operating profit is estimated at $638 million, up 9% year over year.

The Construction & Forestry segment’s sales are estimated at $3,479 million in the fiscal third quarter, up 15% from the prior-year quarter’s levels. The segment’s operating profit is expected to increase 16% to $539 million from the prior-year quarter’s levels. The segment’s sales in the fiscal third quarter are expected to have benefited from strong demand for farm and construction equipment, supported by positive fundamentals, including favorable crop prices, economic growth and increased infrastructure spending. Demand for earthmoving and compact construction equipment end markets remains strong on continued strength in the housing market, increased activity in the oil and gas sector and strong capex programs from the independent rental companies. The segment’s margin might reflect benefits from the Deere-Hitachi transaction and improved price and volume.

The Zacks Consensus Estimate for the Financial Services segment’s revenues is pegged at $895 million for the fiscal third quarter, down 0.7% from the year-ago quarter’s tally. The Zacks Consensus Estimate for the segment’s operating profit is pegged at $288 million compared with the prior-year quarter’s reported figure of $291 million.

Price Performance

Deere’s shares have declined 2.7% in the past year compared with the industry’s loss of 3.2%.

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Stocks Worth a Look

Here are some stocks worth considering as these have the right combination of elements to post an earnings beat this quarter.

The Toronto-Dominion Bank TD has an Earnings ESP of +2.67% and a Zacks Rank #3.

The Zacks Consensus Estimate for the company’s fiscal third-quarter fiscal 2022 earnings is currently at $1.59, suggesting a year-over-year decline of 0.63%. TD’s earnings topped the consensus mark in each of the trailing four quarters, the average surprise being 5.07%.

Hewlett Packard Enterprise Company HPE currently has an Earnings ESP of +2.89% and a Zacks Rank of 2. The Zacks Consensus Estimate for Hewlett Packard’s fiscal third-quarter 2022 earnings is pegged at 48 cents per share, suggesting a 2.13% growth from the year-ago quarter’s levels.

The Zacks Consensus Estimate for its quarterly revenues is pegged at $6.97 billion, suggesting year-over-year growth of 1.02%. HPE has a trailing four-quarter earnings surprise of 7.76%, on average.

Calavo Growers, Inc. CVGW currently has an Earnings ESP of +2.78% and a Zacks Rank #3. The Zacks Consensus Estimate for Calavo Growers’ fiscal third-quarter 2022 earnings per share is currently pegged at 36 cents, indicating 311.7% growth from the prior-year quarter’s tally.

The Zacks Consensus Estimate for CVGW’s quarterly revenues is pegged at $324 million, which indicates year-over-year growth of 13.6%. The company has a trailing four quarters earnings surprise of 24.7%, on average.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.


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Deere & Company (DE) : Free Stock Analysis Report
 
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