Deere and Co (DE)

[DewDiligence]

DE—(+7%)—FY1Q20 results better than investors feared—see my comments at bottom...

PR:
https://www.deere.com/en/our-company/news-and-announcements/news-releases/2020/corporate/first-quarter-earnings/

CC slides:
https://s22.q4cdn.com/253594569/files/doc_financials/2020/q1/1Q_2020_Earnings-Call-Presentation.pdf

Bloomberg:
https://finance.yahoo.com/news/deere-reports-first-quarter-income-114500584.html

“Farmer confidence, though still subdued, has improved due in part to hopes for a relaxation of trade tensions and higher agricultural exports,” Chief Executive Officer John May said in a statement accompanying its fiscal first quarter results.

While the CEO didn’t mention the coronavirus in the statement, his comments may help ease concerns about how much the outbreak will delay China’s return to U.S. agricultural markets as laid out in the phase one trade deal. The tit-for-tat tariff spat with China made American farmers cautious on replacing large equipment, Deere’s top moneymaker.

…Deere maintained its fiscal 2020 [profit] guidance, forecasting a range of $2.7 billion to $3.1 billion.

So, DE’s agriculture business is doing ok, but I thought Covid-19 would cause DE to lower guidance in its Construction Division, which comprises about 1/3 of corporate sales. I don’t understand why that didn’t happen.

The (unchanged) FY2020 profit guidance equates to GAAP EPS of $8.57-9.84, an unusually wide range due to market uncertainties. This EPS range is [-14% to -1%] YOY on a comparable-tax basis, as explained in https://investorshub.advfn.com/boards/read_msg.aspx?message_id=152509594 .