Deere & Co. shares up after fourth-quarter earnings beat Street view | VailDaily.com
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Deere & Co. shares up after fourth-quarter earnings beat Street view

MOLINE, Ill. – Shares of Deere & Co. rose Tuesday after the farm-equipment maker posted fiscal fourth-quarter profits that tumbled 35 percent from a year ago, but still topped Wall Street’s expectations.Deere, one of the world’s largest makers of farm and lawn-care equipment, reported earnings fell to $232.8 million, or 96 cents a share, for the quarter that ended Oct. 31, down from $356.7 million, or $1.41 cents a share, last year.But profits were well above the average estimate of 79 cents a share from analysts polled by Thomson Financial, sending Deere shares up $2.79, or 4.4 percent, to $65.79 in afternoon trading on the New York Stock Exchange.Deere said sales and revenue dipped 0.6 percent to $5.18 billion as depressed farm-machinery sales and plans to introduce new products in 2006 combined to scale back fourth-quarter production. Sales topped $5.21 billion a year ago.”We’re pleased the company remained solidly profitable for the quarter, even though our results were affected negatively by substantial production cutbacks,” Chairman and Chief Executive Robert W. Lane said in a statement.Deere said a 10 percent dip in fourth-quarter farm equipment sales will likely carry into 2006, predicting a 2 percent to 4 percent sales decline because of higher fuel and fertilizer costs, along with the loss of tax incentives that helped fuel U.S. sales in early 2005.But the company said sales will get a boost from new farm products planned for 2006, including a line of more powerful and fuel-efficient tractors.Overall, sales are expected to rise 1 percent to 3 percent in 2006, with a 10 percent to 12 percent jump in consumer equipment sales and a 5 percent to 7 percent sales increase for construction and forestry machines, the company said. The company forecasts 2006 earnings of about $1.5 billion, including $175 million to $200 million in the first quarter.For all of 2005, Deere said full-year earnings rose 3 percent to a record $1.45 billion, or $5.87 per share, compared with $1.41 billion, or $5.56 per share, last year. Annual sales and revenue increased 10 percent to $21.93 billion from $19.99 billion. Analysts expected a full-year profit of $5.68 per share on sales of about $20.2 billion.For the year, Deere farm machinery sales rose 9 percent, while construction equipment sales were up 24 percent, the company said. Consumer equipment sales fell 4 percent as a drought that gripped much of the Midwest held back sales of riding lawn equipment.Along with farm and construction equipment, the company makes consumer products that include mowers, chain saws and snow blowers.—On the Net: http://www.deere.com


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