Deere & Company (DE)’s Q3 Drop In Profit Caused by a Slump In Farm Economy

Deere & Company (NYSE:DE) the American heavy equipment manufacturer released its third quarter earnings report today. The net income for the quarter that ended on July 31, 2014, was $850.7 million, which was considerably lower than last year’s result of $996.5 million. Revenue from worldwide sales for Q3 amounted to $9.5 billion, which showed a decline of 5% compared to the same quarter for the fiscal year 2013.

Deere & Company (NYSE:DE)

Earlier, senior research analyst Michael Cox from Piper Jaffray gave his prediction on Deere & Company (NYSE:DE)’s performance on CNBC’s Earnings Central. Cox stated that Deere & Co’s numbers will not offer any surprises. He said that the key to their growth in the agricultural equipment industry will depend on the farming scene in North America. “John Deere certainly has a very strong market position in North America”, he said. The situation should become clearer once the pre order for combines, to be delivered by 2015, start over the next few weeks.

Talking about Deere & Company (NYSE:DE)’s increased sales of construction equipment over farm equipment, Cox said,“The construction piece to the Deere story is much smaller. So I think investors will remain focused on the Agri equipment side”. While that remains to be seen, the report implies that agricultural equipment sales showed a mediocre performance with profits falling to $941 million from $1.336 billion for the same quarter last year, whereas construction equipment and forestry sales presented a better outlook with profits at $194 million this quarter which is an improvement over last year’s $107 million.

Worldwide forecast for Deere & Company (NYSE:DE)’s agricultural equipment sales for the fiscal year 2014 is dismal as it is expected to go down by 10%. This fall can be attributed to the fall in commodity prices, which translate into decreased farm income and reduced demand for farm equipment. Forecast from Construction & Forestry remains hopeful and is expected to increase by 10%, which will largely be fueled by higher housing starts in the US.

Piper Jaffray has a ‘Neutral’ rating on Deere & Company. Cos pointed out that they have considered the results for the next fiscal year to be below the consensus estimate and added that the Street should reconsider its outlook for the company.

Disclosure: none

Biotech Insider Alert - $6 Stock To Hit $40

$200 Million Dollar Healthcare Hedge Fund's #1 Best Idea Right Now

The best healthcare hedge fund out there right now is one of the largest shareholders in this biotech stock. The fund returned more than 20% in each of the last 2 years with a virtually fully hedged portfolio, and it's sending out a BUY signal on this biotech stock. Get your FREE REPORT today (retail value of $300)

This is a FREE report from Insider Monkey. Credit Card is NOT required.
Comments
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months. Our beta is only 1.2 (don't click this link if beating the market isn't important to you).

Lists

The Greatest Directors in the World

Largest Animals in the World

World’s Most Expensive Desserts

Best Selling Comic Books of All Time

A-list Actors who Sabotaged Their Career

Rappers With a College Degree

The Best Jazz Albums of all Time

The Most Influential Jazz Musicians

The World’s Most Famous Photographers

The Best Oscar-Winning Songs

Most Influential Choreographers Ever

Most Expensive Department Stores in the World

The Most Expensive Stolen Paintings in the World

The World’s Most Expensive Teas

Top Oscar Record Holders

The Most Expensive Flowers in the World

Countries With a Booming Film Industry

Most Expensive Cupcakes in the World

Uncommon European Escapes

The Most Stolen Artists in History

Best Travel Destinations in Australia

World’s Most Expensive Musical Instruments

World’s Most Famous Animals

Most Expensive Cakes in the World

Most Expensive Kosher Champagne in the World

Most Expensive Kosher Wine in the World

The Most Surprisingly Dark Fairy Tales

Most Popular Travel Destinations in Asia

The 10 Most Expensive Dresses Ever Worn to the Oscars

World’s Most Visited Art Museums

Best Countries for Photographers to Work in

Best Paid Jobs in the Film Industry

The Most Renowned Recovered Paintings Ever

Child Stars That Turned out Just Fine

Books That Were Banned in the Past Century

World’s Richest Dancers

Best Remedies against Bad Breath

Foods That Improve Your Skin Texture

Best-Selling Children’s Books of all Time

Foods That Boost Your Libido

Best-Selling Books of all Time

The Most Expensive Academy Awards Jewelry in History

Most Expensive Japanese Restaurant In New York City

The Best B-Boy Movies

Most Awesome Hip Hop Documentaries

Foods That Stain Your Teeth

Richest Doctors in the World

The Best Movie Sountracks Ever

The Highest Grossing Musicals on Broadway

The Most Successful Reality TV Stars

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 129% in 2.5 years!! Wondering How?

Download a complete edition of our newsletter for free!