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Key Takeaways from Deere's 4Q16 Earnings

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Key Takeaways from Deere's 4Q16 Earnings PART 1 OF 7

Deere Rose to an All-Time High after Crushing Consensus Twice

Deere’s 4Q16 earnings

Deere & Company (DE) released its fiscal 4Q16 earnings before the markets opened on November 23, 2016. The company’s 4Q16 earnings release was a snapshot of the company’s operating performance in the three-month period between August and October. The company reported diluted EPS (earnings per share) of $0.90 and crushed consensus estimates by $0.50. In the same period last year, Deere reported diluted EPS of $1.08.

Deere’s earnings release resulted in a massive 11.3% rise in DE stock, which rose to an all-time high and closed at $102.17 on November 23. The previous quarter’s earnings beat followed a pattern similar to the one in the third quarter. As a result, investor reaction to the earnings release was similar.

Optimism for the stock rubbed off on some of its competitors. Caterpillar (CAT), AGCO (AGCO), and CNH Industrial (CNHI) rose 2.7%, 3.2%, and 4.7%, respectively, that same day.

Deere Rose to an All-Time High after Crushing Consensus Twice

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Management commentary

Commenting on Deere’s 4Q16 earnings, Samuel R. Allen, the company’s chair and chief executive officer, said, “John Deere has completed another successful year in spite of continuing weakness in the global agricultural and construction equipment sectors.”

Allen went on to say, “The company in 2016 had one of its ten-best years in both sales and earnings, a noteworthy achievement in light of the difficult business climate. Deere’s performance benefited from the adept execution of its operating plans and disciplined cost management as well as the impact of a broad product portfolio. As a result, the company has remained well-positioned to serve its customers while making continued investments in quality and innovation that we’re confident will be supportive of growth in the future.”

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