Deere Gears Up to Report Q1 Earnings: What to Expect for the Stock?
Deere & Company DE is scheduled to report first-quarter fiscal 2025 results on Feb.13, before the opening bell.
Find the latest EPS estimates and surprises on Zacks Earnings Calendar.
The Zacks Consensus Estimate for Deere’s earnings has moved down 0.3% over the past 60 days to $3.14 per share. The consensus mark implies a 49.6% plunge from the year-ago actual. The consensus estimate for revenues is pegged at $7.7 billion, indicating a 26.6% year-over-year decline.
DE’s Solid Earnings Surprise History
Deere’s earnings beat the Zacks Consensus Estimates in the trailing four quarters, the average surprise being 13.5%.
What the Zacks Model Predicts for Deere
Our model predicts an earnings beat for DE this time around. 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. That is precisely the case here.
Earnings ESP: The Earnings ESP for Deere is +1.12%. You can uncover the best stocks before they are reported with our Earnings ESP Filter.
Zacks Rank: Deere currently carries a Zacks Rank #3.
Factors Likely to Have Shaped DE’s Q1 Performance
Deere has been facing challenges due to weak farmer spending amid low commodity prices. In the wake of challenging conditions in the global agricultural and construction sectors, DE has been aligning its production with demand levels. This is likely to have weighed on the company’s fiscal first-quarter performance.
High production expenses; selling , administrative and general expenses; and research and development expenses are likely to have impacted the company’s margin in the quarter.
Nevertheless, favorable price realization is expected to have negated some of these headwinds, as seen in the fiscal fourth quarter.
Projections for DE’s Segments in Q1
Our model predicts the Production & Precision Agriculture segment’s revenues to be $3.59 billion for the fiscal first quarter, suggesting a year-over-year decrease of 26%. We expect the segment’s operating profit to be $422 million, indicating a 59.6% fall from the prior-year quarter’s reported figure. Gains from price realization are likely to have been offset by escalated production expenses and lower shipment volumes.
Our estimate for the Small Agriculture & Turf segment’s revenues is pegged at $1.90 billion for the fiscal first quarter, indicating a 21.5% decline from the prior-year quarter’s actual. The segment’s operating profit is estimated at $174 million, suggesting a 46.6% year-over-year fall. The Small Agriculture & Turf segment’s performance is expected to have been affected by elevated production expenses higher research and development, and selling, general and administrative expenses; and lower shipment volumes, partially offset by price realization.
The Construction & Forestry segment’s sales are estimated to be $2.35 billion for the fiscal first quarter, suggesting a 26.9% dip from the prior-year quarter’s reported number on lower volume. We predict the segment’s operating profit to plunge 56.5% year over year to $596 million.
Our estimate for the Financial Services segment’s revenues is pegged at $1.59 billion for the fiscal first quarter, indicating an 11.1% rise from the year-ago quarter’s actual. Our projection for the segment’s operating profit is $230 million. The segment reported operating profit of $257 million in the prior-year quarter.
DE Stock’s Price Performance
Shares of the company have gained 21.3% in the past year compared with the industry’s 18.7% growth.
Deere’s Peer Performance
AGCO Corp. AGCO delivered adjusted earnings per share of $1.97 in fourth-quarter 2024 compared with the prior-year quarter’s $3.78. However, the reported figure beat the Zacks Consensus Estimate for EPS of $1.80.
Net revenues decreased 24% year over year to $2.89 billion in the December-end quarter. The top line missed the Zacks Consensus Estimate of $3.16 billion. Excluding the unfavorable currency-translation impacts of 1.8%, net sales fell 22.2% year over year.
Other Stocks to Consider
Here are some other companies with the right combination of elements to post an earnings beat in their upcoming releases.
Flowserve Corporation FLS is ready to release its fourth-quarter 2024 results on Feb. 18. It has an Earnings ESP of +2.60% and a Zacks Rank of 3 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for FLS’s earnings is pegged at 77 cents per share, which indicates year-over-year growth of 13.2%. It has a trailing four-quarter average surprise of 10.8%.
Ashtead Group plc ASHTY, expected to release its third-quarter fiscal 2025 results soon, has an Earnings ESP of +11.11% and a Zacks Rank of 3 at present.
The Zacks Consensus Estimate for Ashtead’s third-quarter earnings is pegged at $3.47 per share, suggesting year-over-year growth of 7.1%.
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