CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 79% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
US English

Deere (DE) tops estimates despite strike, supply chain issues

By Kevin Donovan

13:27, 24 November 2021

Woman driving John Deere backhoe
John Deere reports Q4 income up 69% to $1.28bn – Photo: John Deere

Deere & Co, the parent of consumer lawncare and industrial farming-equipment manufacturer John Deere, beat both top- and bottom-line Wall Street estimates, despite a month-long labour strike and continued supply-chain disruptions.

Deere gained almost 3% to start the day. The stock opened at $359.27 in the US on Wednesday after trading as much as 3.10% higher in the pre-market to $360.12 per share, following Monday’s 0.03% rise to $349.28 per share.

Financial results reflect ‘strong end-market demand’

Moline, Illinois-based Deere reported fourth quarter earnings per share (EPS) of $4.12 on $11.3bn (£8.46bn) in revenue, versus estimates of $3.87 EPS and $10.5bn in revenue. EPS for the three months ended 31 October was 72% higher than the same quarter last year. Revenue improved 16%.

Quarterly net income was $1.28bn, up 69% from the $757m in the comparable quarter in 2020.

For the full fiscal year, Deere tallied $18.99 per share earnings, versus $8.69 in 2020, on $44bn in revenue. Revenue was 24% higher than the $35.5bn reported in 2020. Full year net income for 2021 totalled $5.96bn, up 117% from the $2.75bn in fiscal-year 2000.

“Our results reflect strong end-market demand and our ability to continue serving customers while managing supply-chain issues and conducting contract negotiations with our largest union,” said Deere CEO John May in a prepared statement.

What is your sentiment on DE?

360.19
Bullish
or
Bearish
Vote to see Traders sentiment!

Labour deal brings employees back to work

“Last week’s ratification of a six-year agreement with the United Auto Union (UAW) brings our highly skilled employees back to work building the finest products in our industries,” May added. “The agreement shows our ongoing commitment to delivering best-in-class wages and benefits.”

While May expressed optimism for continued strong demand for farming and lawncare equipment, he sounded a cautious note over Deere’s ability to manage ongoing supply-chain disruptions.

TSLA

249.99 Price
+0.860% 1D Chg, %
Long position overnight fee -0.0262%
Short position overnight fee 0.0040%
Overnight fee time 22:00 (UTC)
Spread 0.13

AMZN

147.64 Price
+0.370% 1D Chg, %
Long position overnight fee -0.0262%
Short position overnight fee 0.0040%
Overnight fee time 22:00 (UTC)
Spread 0.18

COIN

130.74 Price
+2.100% 1D Chg, %
Long position overnight fee -0.0262%
Short position overnight fee 0.0040%
Overnight fee time 22:00 (UTC)
Spread 0.20

NVDA

482.00 Price
+0.850% 1D Chg, %
Long position overnight fee -0.0262%
Short position overnight fee 0.0040%
Overnight fee time 22:00 (UTC)
Spread 0.32

“[W]e anticipate supply-chain pressures will continue to pose challenges in our industries,” May added. “We are working closely with our suppliers to address these issues and ensure that our customers can deliver essential food and infrastructure more profitably and sustainably.”

2022 full-year outlook

Looking ahead, Deere anticipates full fiscal year 2022 net income of $6.5bn–$7bn, a 9.1%–17.4% increase versus 2021.

These estimates factor in an estimated $2bn in cost increases, felt mostly in the first half of 2022, noted Deere CFO Ryan Campbell on the post-earnings conference call. The cost increases are the result of both supply-chain challenges combined with lost production due to the aforementioned work stoppage.

Record low inventory

Cory Reed, Deere’s President of Agricultural and Turf Equipment reported record low field inventory, which he sees continuing through 2023. “Our order books for large [agricultural products] are full or near full,” Reed added on the call.

Campbell added the later-than-expected collective bargaining agreement ratification with the UAW labour union, which didn’t occur until 17 November, will cause production lags into Deere’s fiscal first quarter of 2022.

“The gap between contracts means we missed a few weeks of production,” Campbell added. “We expect the delayed ratification to impact margins in the first quarter down to the single digits.”

Read more: John Deere workers strike after contract talks fail

Markets in this article

DE
Deere
360.19 USD
-2.14 -0.590%
DE
Deere
360.19 USD
-2.14 -0.590%

Related topics

Rate this article

The difference between trading assets and CFDs
The main difference between CFD trading and trading assets, such as commodities and stocks, is that you don’t own the underlying asset when you trade on a CFD.
You can still benefit if the market moves in your favour, or make a loss if it moves against you. However, with traditional trading you enter a contract to exchange the legal ownership of the individual shares or the commodities for money, and you own this until you sell it again.
CFDs are leveraged products, which means that you only need to deposit a percentage of the full value of the CFD trade in order to open a position. But with traditional trading, you buy the assets for the full amount. In the UK, there is no stamp duty on CFD trading, but there is when you buy stocks, for example.
CFDs attract overnight costs to hold the trades (unless you use 1-1 leverage), which makes them more suited to short-term trading opportunities. Stocks and commodities are more normally bought and held for longer. You might also pay a broker commission or fees when buying and selling assets direct and you’d need somewhere to store them safely.
Capital Com is an execution-only service provider. The material provided on this website is for information purposes only and should not be understood as an investment advice. Any opinion that may be provided on this page does not constitute a recommendation by Capital Com or its agents. We do not make any representations or warranty on the accuracy or completeness of the information that is provided on this page. If you rely on the information on this page then you do so entirely on your own risk.

Still looking for a broker you can trust?

Join the 570.000+ traders worldwide that chose to trade with Capital.com

1. Create & verify your account 2. Make your first deposit 3. You’re all set. Start trading