Deere Q4 Earnings Beat Estimates, Shares Gain

Shares of

surged over 5 percent in pre-market trading after the company reported better-than-expected earnings for its fiscal fourth quarter The company reported quarterly net income of $351.2 million, or $1.08 per share, down from $649.2 million, or $1.83 per share, in the year-ago period. Worldwide net sales and revenue dropped 25 percent to $6.715 billion, while net sales of the equipment operations slipped to $5.932 billion from $8.043 billion. Analysts were expecting earnings of $0.75 per share on revenue of $6.12 billion. The average estimate among 63 Estimize users was for earnings of $0.81 per share and revenue of $6.29 billion. Equipment net sales in the United States and Canada slipped 23 percent in the quarter while sales outside the U.S. and Canada declined 31 percent for the quarter. Agriculture & Turf division sales dropped 25 percent for the quarter, while Construction & Forestry division sales slipped 32 percent for the quarter. Net income of its equipment operations dropped to $200 million for the fourth quarter from $488 million, while financial services reported net income of $153.0 million, versus $172.2 million in the year-ago quarter. "John Deere has completed a successful year in the face of further weakness in the global agricultural sector and a slowdown in construction-equipment markets," said Samuel R. Allen, chairman and chief executive officer. "Sales and earnings for the year were the sixth-highest in company history, a notable achievement in light of the challenging market conditions we experienced. The company's performance benefited from the adept execution of our business plans and disciplined cost management. As a result, Deere remains well-positioned to serve its customers while continuing to make investments in quality and innovation that are designed to drive growth in the future." The company expects equipment sales to drop around 7 percent for fiscal 2016. It also projects equipment sales to decline around 11 percent for the first quarter. Deere shares gained 5.12 percent to $80.26 in pre-market trading.