On Nov 29, the Board of Directors at DE announced a 12.8% increase in the company’s quarterly cash dividend to 44 cents per share from 39 cents. DE has a current dividend yield of 1.5% and a five-year average dividend yield of 1.8%.
Deere & Company manufactures and distributes agricultural and commercial equipment worldwide. The company has four manufacturing divisions: Agricultural Equipment, Commercial and Consumer Equipment, Construction and Forestry Equipment, and Power Systems. DE is also one of the largest equipment finance companies in the United States.
DE exceeded analysts’ earnings expectations for six consecutive quarters by an average margin of 15.3%. Moreover, the company beat the consensus estimate in 14 out of the past 16 quarters. DE managed to surprise by a double-digit percentage in 10 out of the 14 quarters.
On Feb 14, DE posted first-quarter fiscal 2007 profits of $238.7 million, or $1.04 per share, which beat the Street’s estimate by 26.8%. When compared to the prior-year period, the company’s earnings were up a solid 10.6%. Revenues increased 4.8% to $4.4 billion from $4.2 billion in the first quarter of fiscal 2006. DE increased revenues for the past seven years and expanded gross margins and grew profits for five years running.
Chairman and CEO Robert W. Lane stated,
Exciting new equipment and services are helping John Deere attract customers and expand our market presence throughout the world. In addition, our focus on rigorous asset management is allowing Deere to serve a growing global customer base while maintaining lean, efficient inventory levels.
The consensus earnings estimate for this quarter increased 5.3% to $2.37 per share over the past 30 days, and reflect upward revisions by six analysts. Profit forecasts for this year have risen 4.1% to $6.56 per share over the same period of time. Revised estimates were submitted by 11 analysts. Earnings per share are projected to grow 10.1% over the next 3-5 years.
On Nov 29, the Board of Directors at DE announced a 12.8% increase in the company’s quarterly cash dividend to 44 cents per share from 39 cents. Since early 2004, the company has boosted the quarterly dividend rate on four occasions, by a combined total of 100%. DE has a current dividend yield of 1.5% and a five-year average dividend yield of 1.8%.
On Feb 19, DE stated that it will purchase LESCO, Inc., a Cleveland-based supplier of fertilizer, seed and chemicals for lawn and golf course maintenance, for $135 million. “We seek business opportunities that bring new customers to John Deere and that offer new products and services to our existing customers,” said Nate Jones, president of Deere's commercial and consumer division.
DE’s return on equity nearly triples that of the industry average—20% compared to 7%.
DE 1-yr chart: