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Deere & Co.'s FQ2 earnings dropped a less-than-expected 16% to $2.72/share ($624 million) from $3.13 last year; last year's results included the now discontinued healthcare unit, net of which the company would have earned $2.17. Revenue rose 5% to $6.88 billion. Both numbers beat analyst estimates of $2.41 on $6.46 billion. The world's largest maker of farm equipment said it plans a 2% price hike this year, and has added new tractors to keep up with growing demand from the corn/ethanol industry: "Improving conditions in the global farm sector, coupled with a positive customer response to the company's innovative product lineup, are continuing to drive strong results," said Robert Lane, CEO. In February, the Deere and Co 16 05 2007 Chartcompany raised its 2007 income guidance from $1.33 to $1.4 billion, and said sales would increase slightly. Deere shares are up 38% over the last year, 27% YTD, and are up 1.7% to $122.66 in pre-market trading.

Sources: Press release, MarketWatch, Bloomberg
Commentary: Agricultural Commodities: Profiting From Supply and Price IncreasesBarron's: Corn Prices Will Fuel Deere & Co. GrowthWhy Durable Competitive Advantage Matters
Stocks/ETFs to watch: Deere & Company (DE). Competitors: Caterpillar Inc. (CAT), CNH Global N.V. (CNH), Kubota Corp. (KUB), Terex Corp. (TEX), Joy Global Inc. (JOYG). ETFs: Vanguard Industrials ETF (VIS), PowerShares Industrial ETF (PRFN), PowerShares DB Agriculture Fund (DBA)

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Source: Deere Beats Estimates on Strong Corn Market