Monday, February 6, 2023
HomeMarketDeere Earnings Are Coming. The Outlook Could Be Strong.

Deere Earnings Are Coming. The Outlook Could Be Strong.

Deere reports fiscal-fourth-quarter earnings Wednesday.

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Justin Sullivan/Getty Images

Weary investors can be thankful headed into the holiday weekend.
Deere
is going to give them an important early look into how 2023 is shaping up.

Deere
(ticker: DE) reports fiscal-fourth-quarter earnings on Wednesday, before the market opens for trading.

Deere’s fiscal year-end is in October, corresponding the completion of the U.S. harvest. Investors will extrapolate the company’s outlook for the next fiscal year to other makers of agricultural and construction equipment.

For the quarter, Wall Street is projecting earnings per share of $7.09 from $13.4 billion in sales, according to a poll of analysts by Bloomberg. Deere reported $6.16 a share from $13 billion in sales in its fiscal third quarter which ended in July.

For the coming year, Deere typically gives guidance for net income and cash flow from operations.

Deere had guided fiscal 2022 net income to come in at about $6.8 billion. Now Deere is likely to earn about $7 billion. For fiscal 2023, Wall Street is looking for net income to rise to about $7.9 billion.

Crop prices are one reason things are looking a little better. Crop prices are always important to Deere. They go a long way to determining how much money farmers will make. And farmers buy the bulk of Deere products. Benchmark corn and soybean prices are both up roughly 10% year to date, while wheat prices are up roughly 5%.

Coming into Tuesday trading, Deere stock is up about 20% year to date while the
S&P 500
and
Dow Jones Industrial Average
are off about 17% and 7%, respectively.

Options markets imply the stock will move about 4%, up or down, following earnings. Shares have moved about 6%, up or down, on average following the past four quarterly reports. Shares have gained two times and dropped to times following earnings over that span.

Management will host a conference call at 10 a.m. eastern time to discuss results.

Write to Al Root at allen.root@dowjones.com

Credit: marketwatch.com

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