Deere (DE - commentary - Cramer's Take) is scheduled to report fourth-quarter earnings results before the market opens on Wednesday and will conduct its quarterly conference call later that morning. Deere is expected to earn 99 cents a share on revenue of $6.84 billion. In the year-ago quarter, Deere generated earnings of 94 cents on sales of $5.42 billion.
Deere, which specializes in agricultural and forestry machinery, is not feeling the effects of the global economic crisis to the same extent as retailers or financial corporations. However, this has not made the company immune from the global economic slowdown and stock selloff. Deere stock is off nearly 65% from its all-time high reached earlier this year but bounced off of its four-year support on two occasions during the October-November market selloff.
While food commodity costs have fallen dramatically, global food demand remains quite robust. While North America remains strong, operations in Brazil, where Deere has been investing, could be showing signs of weakness. I would expect to obtain more clarity as to why EPS is expected to rise by only 5% while the top line is expected to grow by 26%. Perhaps the strong dollar has already taken its toll on Deere's bottom line.
P.S. Will you be there when Cramer makes his next move?
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At the time of publication, Rothbort had no positions in stocks mentioned, although positions can change at any time.
Scott Rothbort has over 20 years of experience in the financial services industry. In 2002, Rothbort founded LakeView Asset Management, LLC, a registered investment advisor based in Millburn, N.J., which offers customized individually managed separate accounts, including proprietary long/short strategies to its high net worth clientele. He also is the founder and manager of the social networking educational Web site TheFinanceProfessor.com.
Immediately prior to that, Rothbort worked at Merrill Lynch for 10 years, where he was instrumental in building the global equity derivative business and managed the global equity swap business from its inception. Rothbort previously held international assignments in Tokyo, Hong Kong and London while working for Morgan Stanley and County NatWest Securities.
Rothbort holds an MBA in finance and international business from the Stern School of Business of New York University and a BS in economics and accounting from the Wharton School of Business of the University of Pennsylvania. He is a Term Professor of Finance and the Chief Market Strategist for the Stillman School of Business of Seton Hall University.
For more information about Scott Rothbort and LakeView Asset Management, LLC, visit the company's Web site at www.lakeviewasset.com. Scott appreciates your feedback; click here to send him an email.
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