Deere (DE) Stumped in Q4; Key Segment Margins Compress, Modest Growth Expected

November 21, 2012 7:22 AM EST
Deere & Co. (NYSE: DE) is caught in the headlights today following fourth-quarter results issued earlier.

Sales for the company rose 14.5 percent to $9.05 billion, from $7.90 billion in the same period last year. Deere slightly improved its net income from $670 million up to $688 million, or $1.75 per share.

The Street was modeling revs of $8.85 billion and EPS of $1.88.

Operating margins moved from 14.6 percent down to 13.7 percent.

The Agriculture & Turf segment reported a strong 16 percent gain in sales, though operating profit rose just 7 percent. Conversely, Construction & Forestry revs rose just 7 percent while operating profit improved 38 percent.

Deere sees sales in the 27-member European Union flat to down five percent in its Agriculture & Turf unit. Total agricultural machinery sales are expected to be mostly flat as well.

Looking ahead, Deere sees sales rising 5 percent for fiscal 2013 and up 10 percent for its first quarter. Net income for FY13 is expected to be about $3.2 billion, up 4.4 percent from FY12 net income of $3.07 billion.

Shares of Deere are indicated for a lower open Wednesday.

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