Upcoming AWS Coverage on AGCO Corp. Post-Earnings Results

LONDON, UK / ACCESSWIRE / March 7, 2017 / Active Wall St. announces its post-earnings coverage on Deere & Co. (NYSE: DE). The Company reported its financial results for the first quarter fiscal 2017 (Q1 FY17) on February 17, 2017. The Moline, Illinois-based Company's quarterly net sales and net income were down on a year-over-year basis; however, they outperformed market consensus estimates. Register with us now for your free membership at:

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One of Deere's competitors within the Farm & Construction Machinery space, AGCO Corp. (NYSE: AGCO), reported on February 07, 2017, its Q4 results. AWS will be initiating a research report on AGCO Corp. in the coming days.

Today, AWS is promoting its earnings coverage on DE; touching on AGCO. Get our free coverage by signing up to:

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Earnings Reviewed

During Q1 FY17, Deere's total net sales and revenues grew 2% to $5.63 billion from $5.53 billion recorded at the end of Q1 FY16. However, the Company's net sales were down to $4.70 billion in Q1 FY17 from $4.77 billion in Q1 FY16. Meanwhile, the quarterly net sales numbers topped market expectations of $4.66 billion. The Company's quarterly sales included price realization of 2% and a favorable currency-translation effect of 1%. Equipment net sales in the United States and Canada decreased 8% y-o-y. Whereas, outside the US and Canada, net sales increased 11% y-o-y with a favorable currency-translation effect of 1%.

For the three months ended on January 29, 2017, the Company incurred total costs and expenses of $5.30 billion compared to $5.17 billion in the prior year's same quarter. The Company reported income of consolidated group before income taxes of $328.0 million for Q1 FY17 versus $351.2 million in Q1 FY16.

The agricultural equipment manufacturer's net income attributable to Deere declined 24% to $193.8 million, or $0.61 per diluted share, in Q1 FY17 from $254.4 million, or $0.80 per diluted share, in the year ago comparable quarter. However, the Company's net income attributable to Deere beat market estimates of $0.50 per diluted share.

Segment Performance

The Agriculture and Turf segment reported a flat revenue growth during Q1 FY17 which stood at $3.60 billion. The segment's operating profit surged to $213 million, or 5.9% of segment net sales, in Q1 FY17 from $144 million, or 4.0% of segment net sales, in Q1 FY16.

In Q1 FY16, Construction and Forestry segment's revenues fell 6% to $1.10 billion from $1.17 billion in the prior year's corresponding quarter. The segment's operating profit also fell to $34 million, or 3.1% of segment net sales, in Q1 FY17 from $70 million, or 6.0% of segment revenues, in Q1 FY16.

During Q1 FY17, Financial Services segment contributed $696 million to total net sales and revenues, rising 9% from $636 million in the last year's comparable period. However, the segment's adjusted operating profit declined 13% during Q1 FY17 to $169 million from $194 million in Q1 FY16. Furthermore, the segment's contribution to the net income attributable to Deere during Q1 FY17 was $114.4 million compared to $129.4 million in Q1 FY16.

Cash Flow and Balance Sheet

In Q1 FY17, Deere generated $1.10 billion as net cash from investing activities compared to $851.6 million in Q1 FY16. As of January 29, 2017, the Company had cash and cash equivalents balance of $3.89 billion compared to $3.46 billion at the close of books on January 31, 2016. Furthermore, the Company's long-term borrowings as on January 29, 2017, was $22.92 billion compared to $24.47 billion as on January 31, 2016.

Dividend

In a separate press release on February 22, 2017, Deere's Board of Directors declared a regular quarterly dividend of $0.60 per share on common stock, payable May 01, 2017, to stockholders of record on March 31, 2017.

Outlook

In its guidance for full-year FY17, the Company expects Agriculture and Turf equipment worldwide sales to increase by about 3%. Construction & Forestry's worldwide sales for FY17 are forecasted to be up about 7%. Deere's equipment sales are projected to increase about 4% for FY17 and be up about 1% for Q2 FY17 compared with the same periods of 2016. On the other hand, net income attributable to Deere & Company from the financial services operations is expected to be approximately $480 million in FY17.

Stock Performance

On Monday, March 06, 2017, the stock closed the trading session at $110.84, marginally climbing 0.01% from its previous closing price of $110.83. A total volume of 1.69 million shares have exchanged hands. Deere's stock price surged 8.55% in the last three months, 34.40% in the past six months, and 34.30% in the previous twelve months. Furthermore, since the start of the year, shares of the Company have gained 7.57%. The stock is trading at a PE ratio of 24.00 and has a dividend yield of 2.17%.

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SOURCE: Active Wall Street