Deere & Co report due Wednesday

Deere & Co is due to report its third-quarter results on Wednesday 13 August. The consensus is for earnings per share of $2.22 and revenue of $8.92 billion.

Deere & Co logo
Source: Bloomberg

Deere & Co is trading at $85.40. The stock is down 8.8% since it revealed its second-quarter earnings in May, when revenues missed expectations but EPS exceeded estimates. The company also lowered its full earnings forecast. Falling agricultural commodity prices have stemmed the sales of farm machinery - in 2013 over 75% of Deere & Co’s revenue came from agricultural machinery sales. Sales from forestry and construction equipment account for 16% of the company’s income. An upturn in the US housing market has prompted the company to increase its sales forecast for construction equipment.

Recently Caterpillar posted a rise in profits but a decline in revenues. The company also adjusted its full-year sales forecast lower, citing a slowdown in Chinese construction as one of the factors. Year-to-date, Deere & Co is down 6.3% while Caterpillar is up 13% over the same period.

There are similarities between the two, but keep in mind Deere & Co is more farming-focused while Caterpillar is more mining-focused. Equity analysts are relatively neutral on Deere & Co; out of the 24 ratings, four are buys, 15 are holds and five are sells. The stock is receiving support at the $84 level. Good figures and a positive outlook could put the stock on a path to $88.34.

This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.

Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 79% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work, and whether you can afford to take the high risk of losing your money. Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage.