Deere & Company DE is set to release its fourth-quarter fiscal 2023 results on Nov 22, before the opening bell.
Estimate Trends
The Zacks Consensus Estimate for Deere’s earnings per share is $7.49 for the fiscal fourth quarter, indicating a 0.67% increase from the year-ago figure. The Zacks Consensus Estimate for total revenues is $13.8 billion, denoting a 3.9% decline year over year.
Performance in Previous Quarters
In the third quarter of 2023, Deere outperformed the Zacks Consensus Estimate for sales and earnings, with both metrics showing year-over-year growth. The company has an average trailing four-quarter earnings surprise of 15.4%.
Model Predictions
Our model indicates an upcoming earnings beat for Deere for the fourth quarter of fiscal 2023. The combination of a positive Earnings ESP and a Zacks Rank of #1 (Strong Buy), 2 (Buy), or 3 (Hold) heightens the chances of a positive earnings report.
Key Factors Impacting Performance
Despite volatile agricultural commodity prices, the overall trend has been favorable, potentially leading to increased spending on new agricultural equipment. Deere’s fiscal fourth-quarter revenues are projected to reflect the preference for its products, known for their advanced technologies and features.
However, the company is likely to have faced challenges from high production costs, increased expenses in various areas, and adverse foreign currency effects, which may have impacted its margins.
Despite these challenges, positive price realization and higher shipment volumes/sales mix are expected to counter some of these headwinds, similar to the trend seen in the fiscal first quarter. Additionally, recent industry observations indicate that supply-chain issues have started to show signs of improvement, potentially benefiting Deere’s performance in the fourth quarter.
Segment Projections
Our model projects the Production & Precision Agriculture segment’s fourth-quarter revenues at $6,567 million, reflecting an 11.7% decline year over year. The segment’s operating profit is anticipated to be $1,677 million, indicating a 3.6% drop from the previous year.
Deere’s shares have declined by 7.5% over the past year, compared with the agricultural equipment industry’s fall of 73.4%.
