Skip navigation
Watchlist Sponsored By :

Current DateTime: 12:40:15 04 Jul 2009
LinksList Documentid: 24355697
  • Collection of Michael Jackson

      Earlier this year, Jackson sought to auction his personal items. Although it never came through, here's a look at what was almost sold.

  • Recession-Resistant US Cities

      Some cities have been hit much harder than others during the recession. Here are the metro areas faring the best.

  • How Much For A T-Bone Steak?

      From the cost of a T-bone steak to a monthly phone bill, the price for everyday items can vary dramatically across the country.


Current DateTime: 12:39:39 04 Jul 2009
LinksList Documentid: 24890560
  • Boom, Bust and Blame

      The inside story of the economic crisis that has gripped the entire world.

  • E3: Gaming's Cutting Edge

      North America's premier computer and video game trade show draws tens of thousands of professionals to experience the future of interactive entertainment.

  • The Fall of GM

      A look into the fall of General Motors as the automaker heads toward bankruptcy and an effective nationalization.

Deere Profit Up as Crop Prices Soar, But Outlook Dims
By: Reuters | 14 May 2008 | 08:21 AM ET
Text Size

Deere & Co reported higher quarterly earnings Wednesday as soaring crop prices boosted global demand for its agricultural equipment, but the company's forecast for the rest of the year disappointed Wall Street and its shares fell 9 percent.

Deere [DE  Loading...      ()   ], the world's largest maker of tractors and combines, said raw material prices, particularly for steel, were "racing ahead ... well beyond what we anticipated" when the company set its own prices for the year. It said this would be a drag on results in the current quarter.

John Deere
AP

The company said its material and freight costs would be $400 million to $500 million higher this year than in 2007, double the price inflation it originally expected.

Deere said profit rose 22 percent to $763.5 million, or $1.74 a share, in its fiscal second quarter ended April 30, from $623.6 million, or $1.36 a share, a year earlier.

Revenue increased 18 percent to $8.1 billion, lifted by a 46 percent jump in equipment sales outside the United States and Canada.

Analysts on average had expected the Moline, Illinois-based company to report earnings of $1.74 a share on revenue of $7.62 billion, according to Reuters Estimates.

"It was a good quarter," said Matt Collins, an analyst at Edward Jones. "But investors were clearly looking for more. Deere had been leaping over earnings estimates for the last two years.That couldn't last forever."

Deere warned that "escalating raw material costs and the tight supplies of various parts and components, including tires, are expected to have an impact on operations for the balance of the year."

As a result, the company said it expects net profit of $550 million to $575 million for the third quarter and $2.2 billion for the full year.

Eli Lustgarten, an analyst at Longbow Research, said that translates to earnings per share of $1.25 to $1.30 for the third quarter and $5 for the full year.

Analysts, on average, forecast $1.49 for the quarter and $5.20 for the year, according to Reuters Estimates.

Lustgarten said of the second-quarter results, "It's a good quarter. But it didn't knock the socks off anyone and the guidance is very conservative."

Michael Jaffe, an analyst at Standard & Poor's, reiterated his "hold" rating on Deere shares, saying weak U.S. residential markets -- the company also builds construction and forestry equipment that has been hit by the housing downturn -- would partially offset the strength coming out of the farm markets.

Deere and rival farm equipment makers CNH Global [CNH  Loading...      ()   ] and Agco [AG  Loading...      ()   ] are enjoying record demand for their products thanks to the surge in investment in biofuels and increased consumption in the developing world.

Deere shares were down $8.12 to $82.07 in morning trade on the New York Stock Exchange.

Copyright 2009 Reuters. Click for restrictions.
Tools:
Print EmailAdd This share icon


Current DateTime: 01:19:05 03 Jul 2009
LinksList Documentid: 29778428

Current DateTime: 01:05:21 03 Jul 2009
LinksList Documentid: 29779196

Current DateTime: 02:33:51 03 Jul 2009
LinksList Documentid: 29779199

Current DateTime: 01:05:21 03 Jul 2009
LinksList Documentid: 29779198
CNBCCNBC
About CNBC  |  Site Map  |  Privacy Policy  |  Terms of Service  |  Video Reprints  |  Advertise  |  Help  |  Contact
Partners: AOL Money  |  BloggingStocks.com
CNBC is a Division of NBC Universal
  Data is a real-time snapshot *Data is delayed at least 15 minutes
Global Business and Financial News, Stock Quotes, and Market Data and Analysis

© 2009 CNBC, Inc.  All Rights Reserved.
Thomson ReutersThomson Reuters