EmailDeere (DE $76.05 -4.08) reported third quarter earnings of $1.98 per share, $0.34 worse than the Capital IQ consensus of $2.32, while revenues rose 15.6% year/year to $8.93 billion versus the $9.53 billion consensus. The company issued downside guidance for the fourth quarter with revenues up ~13% YoY to approximately $8.93 billion versus the $8.98 billion consensus. Co equipment sales are projected to increase by ~13% YoY for both FY12 (down from ~15%) and Q4. Included is an unfavorable currency-translation impact of about 3% for the year and about 4% for Q4. For FY12, net income attributable to Deere & Company is anticipated to be approximately $3.1 billion (down from approximately $3.35 billion) versus the estimates near $3.3 billion. "Global economic conditions and dryness in several key markets warrant some caution in coming months.
However, this year's drought could positively influence our outlook as it spotlights the need for John Deere's highly productive agricultural equipment." Net sales of the worldwide equipment operations increased 16% for the quarter and 13% for nine months compared with the same periods a year ago. Sales included price realization of 5% for the quarter and 4% YTD and an unfavorable currency-translation effect of 5% for the quarter and 3% for nine months. Equipment net sales in the United States and Canada increased 28% for the quarter and 18% year to date. Outside the U.S. and Canada, net sales were essentially unchanged for the quarter and increased 7% for nine months, with unfavorable currency-translation effects of 11% and 6% for these periods.
