Deere’s Still Plowing Ahead

Deere’s Still Plowing Ahead
Daniel Johnston

6 months ago2 mins

What’s going on here?

Deere, the leading farm equipment manufacturer, reported a bumper crop of profit last Friday.

What does this mean?

Last year’s agricultural shortages saw farmers rake in record crop prices, and they took that golden opportunity to upgrade their equipment. And even now, with crop prices dropping and Deere’s products getting Deer-er, demand’s still looking fresh. The appetite for everything from new tractors to spare parts helped the firm smash through profit expectations last quarter – marking a 36% increase from the same time the year before, and notching up Deere’s best-ever second-quarter results. Plus, with the orders still pouring in, the firm upped its profit forecast for the remainder of the year – and investors, betting on a bumper harvest, sent Deere’s stock skyward.

Deere sales

Why should I care?

Zooming in: The plow and the stars.

Deere’s precision agriculture segment – which uses sensors and data analytics to boost crop yields – emerged as the real star last quarter. Thing is, many farms are tucked away in remote areas, where good ol’ network connectivity is as rare as a hen’s tooth. And that’s a problem when your offerings include high-tech autonomous machines. Now, though, the firm’s turning to the heavens for a solution, betting on satellite communications to plug the gap where signal’s sparse. Deere’s already trialing the tech, and if it goes well, analysts think it’ll boost the firm’s overall appeal – while opening some new software-service revenue streams.

Deere production and precision agriculture results
Source: Deere

The bigger picture: Hanging on for Deere life.

Deere’s an economic bellwether, meaning that its performance offers a glimpse into the financial health of the US in general. And these results bode pretty well for the world’s biggest economy: after all, the firm’s juicy profit hardly suggests that the country’s flirting with disaster. And while an easy escape from high inflation might seem far-fetched – history says that a recession’s the usual antidote – a growing number of experts do think that a softer landing could materialize.



All the daily investing news and insights you need in one subscription.

Learn More

Disclaimer: These articles are provided for information purposes only. Occasionally, an opinion about whether to buy or sell a specific investment may be provided. The content is not intended to be a personal recommendation to buy or sell any financial instrument or product, or to adopt any investment strategy as it is not provided based on an assessment of your investing knowledge and experience, your financial situation or your investment objectives. The value of your investments, and the income derived from them, may go down as well as up. You may not get back all the money that you invest. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment advisor.

/3 Your free quarterly content is about to expire. Uncover the biggest trends and opportunities. Subscribe now for 50%. Cancel anytime.

© Finimize Ltd. 2023. 10328011. 280 Bishopsgate, London, EC2M 4AG