Deere beats by $0.08, beats on revs; guides Q3 revs below consensus; raises FY16 rev slightly, lowers FY16 net income slightly :
- Reports Q2 (Apr) earnings of $1.56 per share, $0.08 better than the Capital IQ Consensus of $1.48; revenues fell 3.9% year/year to $7.11 bln vs the $6.66 bln Capital IQ Consensus. Sales included price realization of 1% for both periods and an unfavorable currency-translation effect of 2% for the quarter and 3% for six months.
- Equipment net sales in the United States and Canada decreased 6% for the quarter and 11% year to date. Outside the U.S. and Canada, net sales decreased 1% for the quarter and 4% for the first six months, with unfavorable currency-translation effects of 4% and 7% for the periods.
- Deere's equipment operations reported operating profit of $688 million for the quarter and $902 million for six months, compared with $828 million and $1.242 billion last year. The declines for both periods were primarily due to lower shipment volumes, the unfavorable effects of foreign-currency exchange and the impact of a less favorable product mix. These factors were partially offset by price realization, lower production costs and lower selling, administrative and general expenses.
- Co issues downside guidance for Q3, sees Q3 revs -12% to ~6.02 bln vs. $6.17 bln Capital IQ Consensus Estimate.
- Co issues upside guidance for FY16, raises FY16 revs to -9% (from -10%) to $23.46 bln vs. $23.02 bln Capital IQ Consensus; lowers FY16 net income to $1.2 bln from $1.3 bln.
- "Although our forecast calls for lower results this year in light of ongoing market pressures, Deere is continuing to perform at a much higher level than in previous downturns."
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