The Rising Influence of Rising Affluence

[DewDiligence]

DE falls on “soft” FY3Q17 results:

https://www.wsj.com/articles/deere-sales-miss-expectations-despite-strong-growth-1503059308

Deere said Friday its farm and construction equipment sales rose 17% in its fiscal third quarter ended July 31, but they fell short of expectations and the company’s shares fell 5.4% to $117.31.

Sharply higher sales and profit from Deere’s construction and forestry equipment unit helped offset lackluster farm-related sales in North America, Deere’s biggest market. Equipment demand abroad [Brazil and Argentina, specifically] was also strong.

Across the industry, Deere expects farm-equipment sales in the U.S. and Canada to fall 5% this year. Still, Deere slightly raised its profit forecast for its fiscal year ending Oct. 31 to $2.1 billion and said it expects its own farm and construction equipment sales to rise 10% overall. Deere said market conditions continue to improve, but didn’t offer an outlook for its 2018 fiscal year.

The $2.1B profit guidance for FY2017 equates to EPS of $6.46 (based on 325M diluted shares).

All told, DE’s FY3Q17 results and FY2017 outlook weren’t bad, but some investors were evidently expecting the kind of blowout quarter logged by CAT (#msg-133283322).