The section 179 bonus depreciation expired January 1st. That allowed a bonus depreciation of up to $500k (50% of investment) in addition to the normal accelerated depreciation schedule.
I would expect that many of Deere's small customers accelerated their purchases into 2013 so I wouldn't be surprised if the 1st couple of quarters of 2014 show a slowdown for producers until things level off.
One of our divisions had a hectic 4th quarter and a slower than normal 1st quarter. Things are getting back to normal but those deliveries won't occur until later this year.
DE—After fifteen consecutive record quarterly results, DE finally had a down quarter during FY2Q14 (ending 4/30/14). EPS was $2.65, -4% YoY, and revenue was $9.95B, -9% YoY. Part of the cause was a sales shortfall in Ukraine (a significant ag market), where geopolitical tensions have made it harder for farmers to get credit for equipment purchases.
These results were announced on 5/14/14, and the share price has fallen 4% since then (including a 2% drop on the day of the announcement). The reason the drop hasn’t been more severe is that DE had previously told investors that US farm income—a major driver of ag-equipment sales—would be down slightly from the record level of 2013 (#msg-97190334). Moreover, DE is maintaining its EPS guidance of $8.64 for the full fiscal year (based on 380M diluted shares).
At the current share price of $89.99, the P/E ratio based on FY2014 EPS is only 10.4x, which means I consider DE a strong buy!
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