Could Deere Be Staring at Another Sinkhole This Quarter?
Deere’s earnings in 2Q16
Deere & Company (DE) is the world’s largest manufacturer of tractors and harvesting combines. The company leads market share figures for farm equipment (MOO) in the US. Deere also manufactures construction, forestry, and lawn care equipment. Deere’s global market share position in construction equipment is less commanding. It trails other players such as Caterpillar (CAT), Komatsu, and Terex (TEX). Read Should Investors Hold onto Deere & Company or Steer Clear? for an in-depth overview of Deere.
Deere is slated to declare its 3Q16 earnings before markets open on August 19. The quarterly earnings release is an important snapshot of the company’s operating performance in the three-month period between May and July.
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Deere’s peers in the farm and construction equipment business declared their earnings for the quarter ending June 30 in the past two weeks. In the farm (DBA) equipment space, AGCO (AGCO) and CNH Industrial (CNHI) declared their respective 2Q16 earnings on August 4 and July 26. The farm equipment industry is witnessing its third consecutive year of a downturn. Commodity prices crashed and set back farm incomes in 2015 to levels half of that in 2013. AGCO’s earnings in 2Q16 reflected a continuation of this trend. For more details on AGCO’s 2Q16 results, read Agricultural Leader: Analyzing AGCO’s Earnings in 2Q16.
Among construction equipment competitors, Caterpillar and Terex declared their 2Q16 earnings on July 26 and August 1, respectively. Read Will Caterpillar Be Able to Dig Itself out of the Pit after 2Q16? for details about Caterpillar’s 2Q16 results.