Latest news with #DeereCo
Bloomberg
2 days ago
- Business
- Bloomberg
Deere Eyes Brazil Machinery Sales Beating Europe in Coming Years
Deere & Co expects sales of machinery such as tractors and combines to Brazil will overtake those to Europe in the next five to 10 years, eventually making it the company's second-biggest market. Sales of machines used to sow, spray chemicals and harvest everything from soybeans to corn and sugarcane are expected to climb as the South American country increases its agricultural production, Deere's Chief Financial Officer Joshua Jepsen and Cristiano Correia, production systems vice-president for Latin America, said in an interview.
Bloomberg
23-05-2025
- Business
- Bloomberg
Deere Makes First Investment in Farm Drones With Imaging Deal
World agriculture-equipment leader Deere & Co. is making its first investment in drones with the acquisition of Sentera, a remote imagery provider that can connect to the machines increasingly used on the farm. Drones equipped with Sentera's technology can quickly capture high-resolution images that allow farmers to survey crops and create maps where weeds are located, Deere said in a statement Friday. Terms of the deal weren't disclosed.
Forbes
21-05-2025
- Business
- Forbes
This Snubbed Fertilizer Giant Gave Investors $2 Billion
Tractor cultivating field at spring,aerial view We need to talk about one dividend grower that's set to win big from this sudden breakout of tariff peace. It's an all-American stock that's 'dirt' cheap now. I'm talking about CF Industries (CF), a holding of my Hidden Yields service. CF makes fertilizers and is the world's largest maker of ammonia, a key ingredient of fertilizer. How do we know CF is primed to win as China and Uncle Sam take a breather? We're quite literally following the money here: CF's management team is piling in with huge stock buybacks—to the tune of 20% of the company's 'float' over the last three years. And its board just upped the ante with another $2 billion of repurchases. That's because management sees exactly what we see here. Let's dive into three gusting tailwinds for this 'back-to-the-land' play, starting (where else?) with tariffs. China is one of the biggest buyers of US crops, importing tens of billions of dollars' worth every year. Higher US-China tariffs hurt farmers' profits and slowed business at farm suppliers like CF and equipment maker Deere & Co. (DE). So it follows that the drop in tariffs between the two nations is bullish for farm profits—and fertilizer firms like CF. Tariffs have fallen from a stratospheric 125% to 10% on exports to China and from 145% to 30% on exports from China. As we discussed last week, this sets up a 'Goldilocks' tariff zone that'll protect US suppliers but doesn't restrict trade altogether. That, in turn, will help profits at American farms and at CF, thanks to the company's big US footprint. CF makes ammonia and ammonia-derived products, like granular urea fertilizer, at six plants in America, one in Canada and one in the UK. That American base isn't only a benefit in terms of tariffs—it also lets CF tap cheaper North American natural gas—a big edge, since gas is 70% of the cost of ammonia production. Moreover, CF says it can boost output in the US if needed. In fact, as we'll see below, it's already taking that step—in a smart, low-risk way. The second? Treasury Secretary Scott Bessent, who, as we've discussed recently, plans to tackle inflation with a three-step strategy: You can bet, too, that Trump and Bessent want lower corn and soybean prices, as cheap grocery costs are another administration priority (and are key to slaying inflation). That puts fertilizer makers—especially domestic fertilizer makers like CF—in a great spot, as their products boost crop yields. That, of course, is key to keeping a lid on food prices. Which brings us to our third (and most underrated) tailwind. Few investors realize this, but ammonia is in short supply and, according to CF, about seven more factories are needed to address the shortfall. CF is stepping into the breach with a new $4-billion plant, called the Blue Point Complex, in Louisiana. This facility also includes state-of-the-art carbon capture tech—a smart move to 'future-proof' it. To cut risk and cost, CF is building the plant through a joint venture with Japanese firms Mitsui & Co. and JERA Co. Inc. That leaves CF to foot about $2.2 billion of the overall construction bill. Meantime, CF is already enjoying a rebound in demand for its nitrogen fertilizers and is spending its profits wisely—by buying back its cheap shares, as we touched on earlier. When I say 'cheap,' I'm not kidding. You'd expect a firm with this kind of upside to at least trade for more than the S&P 500. But that's far from the case here. As I write this, CF trades for around 11.4 times trailing earnings, well below the S&P 500 average of around 23. CF has returned $5 billion to shareholders in dividends and buybacks since 2022. Add the fresh $2-billion authorization the board recently approved through 2029, and we're set to see that share count keep dropping. Buybacks like these also drive bigger dividend hikes, because they leave fewer shares on which the company has to pay out. CF's dividend, which yields 2.3%, hasn't been hiked since early 2024—though it did see a healthy 25% boost back then. I expect payout growth to resume soon, thanks to the lower share count and the huge amount of room management already has for increases: In the last 12 months, dividends accounted for just 19% of free cash flow. Finally, CF's balance sheet supports its buybacks and potential dividend hikes, with just $1.6 billion of long-term debt (net of cash), a fraction of its $13.3 billion of assets. Brett Owens is Chief Investment Strategist for Contrarian Outlook. For more great income ideas, get your free copy his latest special report: How to Live off Huge Monthly Dividends (up to 8.7%) — Practically Forever. Disclosure: none
Globe and Mail
19-05-2025
- Business
- Globe and Mail
Analysts Cut Guidance Across Sectors Amid Tariff Shock – But Nvidia (NVDA) May Be the Exception
What happens when strong earnings collide with even stronger uncertainty? That's the story of Q1 2025. On paper, corporate America and global markets posted impressive numbers, beating expectations by a wide margin. But under the surface, anxiety is building. With a surge in tariff threats and geopolitical risks, companies are no longer celebrating – they're bracing. Forecasts are being pulled, guidance is sinking, and executives are sounding cautious even after solid results. It's not about what happened last quarter but what might happen next. Confident Investing Starts Here: Across the U.S., Europe, and China, companies are slashing their 2025 forecasts or pulling them altogether. The reason is soaring costs, shaky consumer sentiment, and trade disruptions linked to President Trump's latest round of tariffs. Many executives are now more focused on preparing for multiple economic scenarios than celebrating last quarter's wins. Cautioned Guidance Despite Solid Results Despite this, the S&P 500 delivered double the expected earnings growth, and Europe's Stoxx 600 beat forecasts with a 5% earnings increase. However, guidance momentum – a measure of how many companies are raising vs. lowering forecasts – has dropped to its lowest point since 2010. That's a big warning sign for markets. Mentions of 'tariffs' during earnings calls surged to a record high this season. Companies like Walmart (WMT) and Deere & Co. (DE) flagged rising costs, with DE estimating a $500 million hit in 2025. Expedia (EXPE) warned of softer U.S. travel demand, while Alibaba (BABA) reported disappointing revenue. Even Mercedes-Benz and Daimler Truck (DTG) cut their guidance due to weak North American orders and pricier parts. Some, like United Airlines (UAL), issued dual profit forecasts depending on whether we get a recession. Others, like Delta (DAL) and American Airlines (AAL), pulled their full-year outlooks completely. And yet, not all is doom and gloom. The bright spot this season was tech, especially the AI heavyweights. So far, six of the 'Magnificent Seven' have reported, and four delivered revenue guidance in line with or above expectations. Alphabet (GOOGL) kept quiet, but investors are watching closely as Nvidia (NVDA) prepares to report on May 28. In Uncertain Times, Data-Driven Investors Stay Ahead So, what does this mean for investors? Volatility is back, and forward guidance is now more influential than raw earnings. But in uncertain times, data-driven decisions matter more than ever. If you're looking for stocks analysts still believe in, check out TipRanks' Smart Score and Top Analyst Picks to stay one step ahead. Using Tipranks' Comparison Tool, we've collected all the publicly traded companies mentioned in the article, despite representing different sectors. This way, you can examine each stock and industry to form your own perspective. Disclaimer & Disclosure Report an Issue
Yahoo
16-05-2025
- Business
- Yahoo
Deere & Co (DE) Q2 2025 Earnings Call Highlights: Navigating Tariff Challenges and ...
Net Sales and Revenues: Down 16% to $12.763 billion. Equipment Operations Net Sales: Down 18% to $11.171 billion. Net Income: $1.804 billion or $6.64 per diluted share. Production and Precision Ag Net Sales: Down 21% to $5.23 billion. Production and Precision Ag Operating Margin: 22%. Small Ag and Turf Net Sales: Down 6% to $2.994 billion. Small Ag and Turf Operating Margin: 19.2%. Construction and Forestry Net Sales: Down 23% to $2.947 billion. Construction and Forestry Operating Margin: 12.9%. Financial Services Net Income: $161 million. Fiscal Year 2025 Net Income Guidance: Between $4.75 billion and $5.5 billion. Effective Tax Rate Guidance: Between 20% and 22%. Operating Cash Flow Guidance: Between $4.5 billion and $5.5 billion. Tariff Impact: Expected pre-tax impact of over $500 million for fiscal year 2025. Warning! GuruFocus has detected 8 Warning Sign with DE. Release Date: May 15, 2025 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Deere & Co (NYSE:DE) delivered a better-than-expected second quarter with an 18.8% margin for equipment operations, showcasing strong execution despite challenging market conditions. The company is committed to investing $20 billion in the US over the next decade, focusing on new product development, cutting-edge technologies, and advanced manufacturing. Deere & Co's Smart Industrial strategy continues to unlock value through the integration of advanced technology with premium equipment, enhancing global competitiveness. The company has seen significant adoption of its Precision Ag Solutions, with nearly 10,000 orders globally in the first half of fiscal 2025, surpassing the entire fiscal 2024 order count. Deere & Co's financial services operations remain stable, with a net income outlook of $750 million for fiscal year 2025, supported by favorable comparisons to special items and lower expenses. Net sales and revenues were down 16% year-over-year to $12.763 billion, with equipment operations sales down 18% to $11.171 billion. The company faces significant tariff headwinds, with an expected pre-tax impact of over $500 million for fiscal year 2025, affecting margins across all segments. Global uncertainty and high interest rates are weighing on customer sentiment and equipment purchases, particularly in the US and Canada. Deere & Co's Construction and Forestry segment experienced a 23% decline in net sales year-over-year, with negative price realization impacting margins. The company is dealing with elevated levels of late-model used inventory in North America, particularly in high-horsepower tractors, which could pressure future sales. Q: Can you talk about the current state and future plans for Deere's SaaS models, particularly regarding Precision Ag Essentials and See & Spray? A: Josh Beal, Director of Investor Relations, explained that Deere's SaaS offerings are categorized into three main areas: precision digital technologies, usage-based technologies like See & Spray, and future autonomous solutions. Precision Ag Essentials includes core elements like connectivity and guidance, offered at a lower upfront cost with an annual license. Josh Jepsen, CFO, added that Deere plans to bundle these solutions to enhance customer value across production systems. Q: What are the key factors affecting the implied profitability in the second half for the Production and Precision Ag segment? A: Joshua Jepsen, CFO, noted that the second half's profitability is impacted by tariff costs, a mix shift due to lower North American large ag production, and less favorable pricing compared to the previous year. These factors, combined with a smaller sales change, result in higher decremental margins. Q: How is Deere approaching pricing and early order programs for 2026, considering the current tariff environment? A: Josh Beal stated that Deere's early order programs for 2026 have begun, with a structure similar to previous years. These programs offer pricing flexibility to adjust to the evolving tariff environment. Deere aims to build in line with retail demand, having successfully reduced new inventory levels. Q: Can you elaborate on Deere's strategy for managing tariff impacts across stakeholders, including vendors, dealers, and customers? A: Josh Beal emphasized a measured approach to managing tariffs, including taking price actions, optimizing sourcing, and working with suppliers. Deere is committed to sharing the tariff burden across stakeholders while maintaining a focus on cost optimization and dual sourcing. Q: How is the used equipment market affecting Deere's pricing capability and inventory management? A: Josh Beal highlighted that Deere has made progress in reducing used combine inventories, with a focus now on high-horsepower tractors. The pace of used equipment movement is uncertain, but Deere is maintaining low new inventory levels and supporting dealers with financing options to manage the used market. For the complete transcript of the earnings call, please refer to the full earnings call transcript. This article first appeared on GuruFocus.
