Preview: Deere's Earnings

On Friday, February 19, Deere DE will release its latest earnings report. Check out Benzinga's preview to understand the implications.

What Are Earnings, Net Income, And Earnings Per Share?

Earnings and EPS are useful metrics of profitability. Total earnings also known as net income is equal to total revenue minus total expenses. Dividing net income by the total number of shares outstanding yields EPS.

Earnings And Revenue

Sell-side analysts expect Deere's EPS to be near $2.12 on sales of $7.21 billion. Deere EPS in the same period a year ago totaled $1.63. Sales were $6.53 billion.

Why Analyst Estimates And Earnings Surprises Are Important

Analysts who cover this company will publish forward-looking estimates of its revenue and EPS each quarter. Averaging together every EPS and revenue prediction that each analyst makes about a company in a quarter yields the "consensus estimates." A company posting earnings or revenue above or below the consensus estimate is known as an "earnings surprise" and may move the stock by a considerable margin.

If the company were to match the consensus estimate when it reports Friday, EPS would be up 30.06%. Sales would be have grown 10.41% from the same quarter last year. Here is how the company's reported EPS has stacked up against analyst estimates in the past:

Stock Performance

Shares of Deere were trading at $311.97 as of February 17. Over the last 52-week period, shares are up 74.58%. Given that these returns are generally positive, long-term shareholders should be satisfied going into this earnings release.

Do not be surprised to see the stock move on comments made during its conference call. Deere is scheduled to hold the call at 10:00:00 ET and can be accessed here.