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Key Takeaways from Deere’s Fiscal 4Q15 Earnings

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Nov. 27 2015, Published 6:23 p.m. ET

Deere’s 4Q15 earnings

Deere & Company (DE) released its fiscal 4Q15 earnings on November 25 before the market opened. The company reported an EPS (earnings per share) of $1.08, which beat analysts’ estimate of $0.75 per share. As a result of a 44% positive earnings surprise, shares closed 4.7% at $80 above the previous day’s closing. However, 4Q15 EPS of $1.08 fell 41% from $1.83 in 4Q14.

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Series overview

In this series, we will discuss Deere’s earnings release and conference call in detail including the management’s perspective on the company’s outlook, a discussion of key issues, and valuation multiples of the company and its peers.

We will also discuss the management’s outlook on the industry, which will help us better understand the environment for Deere as well as other players such as Toro Company (TTC), AGCO (AGCO), and Caterpillar (CAT). Both Deere and Caterpillar make up about 3.5% of the Industrial Select Sector SPDR ETF (XLI).

Deere & Company’s business overview

Deere & Company manufactures and distributes agricultural equipment such as crop harvesters, tractors, hay and forage equipment, and soil preparation machinery, as well as turf equipment such as walk-behind mowers, utility vehicles, and golf course equipment. The company also manufactures and distributes construction equipment such crawler dozers, backhoe loaders, and excavators, as well as forestry equipment such as log loaders and log harvesters.

Deere sells its products through its independent retail outlets and retail dealer network. Since equipment requires a huge amount of capital, Deere also provides financial services to help customers finance new and used equipment.

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