Deere (DE) Reports Solid Q1 Results Ahead of New-Product Launch

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EPS Growth %: +54.4%

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Deere & Company (NYSE: DE) shares are trading down 0.62 percent in the pre-market hours Wednesday following the company's first-quarter results.

Worldwide net sales increased 11 percent to $6.767 billion, compared with $6.119 billion during the same quarter last year and the Street’s consensus of $6.5 billion. Net sales of the equipment operations were $6.119 billion, compared with $5.514 billion a year ago.

Net income was $532.9 million, or $1.30 per share, compared with $513.7 million, or $1.20 per share, for the same period last year. The Street’s consensus was calling for $1.24 per share in earnings. Operating profits for the quarter fell 21 percent year over year from $214 million to $170 million.

The strong growth was largely driven by a 22 percent increase in construction and forestry sales as operating profits grew 41 percent year over year.

The company provided some color into 2012:

Industry farm-machinery sales in the U.S. and Canada are forecast to increase by about 10 percent in 2012
U.S. and Canada industry sales of turf and utility equipment are expected to increase slightly in 2012
World forestry markets are projected to be about the same in 2012 mainly due to economic concerns in Europe
Full-year 2012 net income attributable to Deere & Company for the financial services operations is expected to be approximately $460 million
Administrative and general expenses in support of enterprise growth initiatives are projected to be higher for the year

"By completing another quarter of record performance, John Deere has started 2012 on a strong note," said Samuel R. Allen, chairman and chief executive officer. "These results are evidence of the skillful execution of our operating and marketing plans. They also reflect an enthusiastic response by customers worldwide to our advanced lines of equipment. Maintaining such a high level of execution is especially noteworthy as we move ahead with major new-product launches and significantly expand our global market presence."

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