By Senad Karaahmetovic
Deere (NYSE:DE) shares are up almost 4% in pre-market Wednesday after the maker of agricultural machinery reported better-than-expected FQ4 results.
Deere reported earnings per share of $7.44, ahead of the average analyst estimate of $7.12. Net sales soared +37% to $15.54 billion while equipment sales rose to $14.35B, easily topping estimates of $13.39B.
The company also offered a very promising full-year forecast, which sees net income at $8.25B (up or down $250M) to beat the $7.81B estimate.
“Deere is looking forward to another strong year in 2023 based on positive farm fundamentals and fleet dynamics as well as an increased investment in infrastructure,” CEO John May said.
Goldman Sachs analysts said Deere’s FQ4 beat was driven by very strong sales.
“We maintain our Buy rating on the stock given accelerating precision ag adoption and ag machinery share of farmer capex that is approaching normalized levels this year following an extended capital stock reduction cycle,” they told clients in a note.
Oppenheimer analysts said Deere delivered a "strong finish to its fiscal year."
"On whole, strong execution and a clean beat on the quarter and guide. Having set the expectation last quarter of maintaining its 4Q production run-rate into 1Q, we'll be looking for production cadence for the year, as well as incremental commentary on the demand and pricing backdrop," the analysts wrote.