Dj Deere & Corporate Stock Underperforms Tuesday When Compared To Competitors

AGCO Corporation AGCO delivered an adjusted earnings per share of 68 cents in third-quarter 2024, missing the Zacks Consensus Estimate of $1.07. The bottom line fell 83% year over year. Low commodity prices and elevated input costs impacted equipment demand in the quarter.

Despite the weaker-than-expected earnings, AGCO shares have gained 2% since, backed by the company’s aggressive cost control actions and portfolio adjustments, which will sustain margins amid weak demand. AGCO recently completed the divestiture of the Grain & Protein business on Nov. 1. This will help focus on high-growth agricultural machinery and precision agriculture technology, driving long-term profitability and cash flow.

AGCO Corporation Price, Consensus and EPS Surprise

AGCO Corporation price-consensus-eps-surprise-chart | AGCO Corporation Quote

Including one-time items, AGCO posted earnings of 40 cents per share compared with the year-ago quarter’s earnings of $3.74.

Revenues decreased 24.8% year over year to $2.6 billion in the September-end quarter. The top line missed the Zacks Consensus Estimate of $2.9 billion. Excluding the unfavorable currency-translation impacts of 0.6%, net sales fell 24.2% year over year.

Find the latest EPS estimates and surprises on Zacks Earnings Calendar.

AGCO Corp.’s Q3 Operational Update

Cost of sales decreased 20.8% year over year to around $2 billion in the third quarter. The gross profit decreased 35.4% year over year to $603 million in the reported quarter. The gross margin was 23.2% compared with the prior-year quarter’s 27%.

Selling, general and administrative expenses were $344 million compared with the year-ago quarter’s $356 million. The adjusted income from operations fell 67% year over year to $144 million. The operating margin was 5.5% compared with the year-earlier quarter’s 12.6%.

AGCO’s Q3 Segmental Performance

Sales in the North America segment moved down 21.8% year over year to $736 million in the third quarter. The reported figure missed our estimate of $789 million. The segment reported an operating income of $53 million compared with the prior-year quarter’s $140 million. Our projection for the segment’s operating income was $56 million. The downside was driven by softer industry sales and lower end-market demand.

Sales in the South America segment decreased 47% year over year to $382 million. We expected the segment’s net sales to be $497 million. The segment reported an operating profit of $45 million compared with the prior-year quarter’s $150 million. Our estimate for the segment's operating income was $37 million. The decline was due to softer industry retail sales and lower sales of high-horsepower tractors.

The Europe/Middle East (EME) segment’s sales were around $1.3 billion compared with the $1.6 billion reported in the year-ago period. The reported figure missed our estimate of $1.49 billion, driven by lower sales across most European markets. The EME’s operating income was $83 million compared with the year-ago quarter’s $199 million. We predicted EME’s operating income to be $181 million.

Sales in the Asia/Pacific segment were down 11.7% year over year to $183 million. We expected the segment’s sales to be $163 million. The segment registered an operating profit of $7 million compared with the year-ago quarter’s $19 million. Our projection for the segment’s operating profit was $6.5 million.

AGCO Corp.’s Cash Flow Update

AGCO Corp. reported cash and cash equivalents of $623 million at the end of the third quarter of 2024, up from $596 million at the 2023-end. Net cash used in operating activities totaled $108 in the first nine months of 2024 against a cash inflow of $203 million in the prior-year comparable period.

AGCO’s 2024 Guidance

AGCO Corp expects 2024 net sales to be $12 billion. This marks a decline from the $12.5 billion stated earlier due to lower sales volumes. The guidance, however, included the positive impacts of the PTx Trimble acquisition completed in April 2024 and the impacts of the Grain and Protein business divestiture.

Management lowered its adjusted EPS projection to around $7.50 from the previously stated $8.00 for 2024.

The company reaffirms its 2024 adjusted operating margin outlook of 9%. AGCO expects the impact of lower sales and lower production volumes on its margins will be offset by its increased focus on cost control and modestly lower investments in engineering.

AGCO Corp.’s Price Performance

AGCO Corp’s shares have lost 16.8% in the past year against the industry’s growth of 7.1%.

AGCO’s Zacks Rank

AGCO currently carries a Zacks Rank #5 (Strong Sell).

You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.

AGCO Corp.’s Peer Performances

Lindsay Corporation LNN delivered adjusted earnings per share of $1.17 in fourth-quarter fiscal 2024 (ended Aug. 31. 2024), beating the Zacks Consensus Estimate of $1.04. However, the bottom line fell 33% year over year.

The company generated revenues of $155 million, down 7% from the $167 million reported in the year-ago quarter. The top line surpassed the Zacks Consensus Estimate of $154 million.

CNH Industrial N.V. CNH came out with third-quarter 2024 earnings of 24 cents per share, missing the Zacks Consensus Estimate of 28 cents. This compares to earnings of 42 cents a year ago.

CNH posted revenues of $5.65 billion for the quarter ended September 2024, missing the Zacks Consensus Estimate of $4.78 billion. The top line decreased 22.3% year over year.

Farm Equipment Stock Awaiting Results

Deere & Company DE is expected to release its fourth-quarter fiscal 2024 results on Nov. 21.

The Zacks Consensus Estimate for the company’s earnings per share is pegged at $3.90 for the fiscal fourth quarter, suggesting a decline of 52.8% from the year-ago reported figure. The Zacks Consensus Estimate for DE’s total revenues is pinned at $9.34 billion, indicating a year-over-year decrease of 32.4%.

Zacks Investment Research

Elon Musk‘s fortune skyrocketed past $300 billion on Friday, fueled by a sharp rally in Tesla Inc. 's stock after Donald Trump's election as the 47th U.S. president.

According to Forbes’ Real-Time Billionaires List, Musk’s net worth reached $305 billion — distantly followed by Oracle Inc. co-founder Larry Ellison at around $231 billion, and Amazon.com Inc. 's Jeff Bezos, who trails at approximately $225 billion.

Musk is now more than $100 billion richer than Meta Platform Inc.‘s CEO Mark Zuckerberg.

The electric carmaker's shares rocketed nearly 30% over the week, driving the company's market capitalization beyond the $1 trillion mark and delivering Musk a massive windfall.

Other than deriving much of his wealth from Tesla, Musk has also diversified his fortune in SpaceX, founded in 2002, which is worth nearly $210 billion based on a tender offer launched during the second half of 2024. Musk owns an estimated 42% stake.

Musk bought Twitter in a $44 billion (enterprise value) deal in 2022, although Forbes estimates that the social media company, which he renamed X, is worth nearly 70% less as of August 2024.

Musk owns an estimated 60% of xAI, which he founded in 2023. Private investors valued the company at $24 billion in May 2024.

Why Trump's Victory Was A Big Win For Musk

Trump's stance on tariffs, specifically on vehicles imported from Europe and China, could potentially make it tougher for foreign carmakers to compete in the U.S. market — an advantage that could drive up Tesla's market share on its home turf.

A Trump presidency would likely mean the end of EV subsidies and tax credits during Tesla’s second-quarter earnings call.

The impact would be slight for Tesla and devastating for its competitors. “But long term probably actually helps Tesla, would be my guess, yes,” Musk has said.

Musk has also been an active political backer for Trump's 2024 campaign, reportedly donating over $130 million to support his re-election efforts.

Trump’s victory speech didn't shy away from showing gratitude either.

As Forbes highlighted, Trump took nearly 4 minutes in his first speech to praise Musk, calling him a "super genius" and highlighting Tesla's achievements, from SpaceX's rocket launches to the expanding satellite internet network.

"A star is born — Elon!" Trump declared.

Musk has expressed enthusiasm about heading a proposed Department of Government Efficiency (D.O.G.E.), where he'd lead efforts to trim wasteful spending from the federal budget. Trump touted Musk as the ideal candidate to serve as the "Secretary of Cost-Cutting," potentially overseeing an ambitious plan to slash $2 trillion in federal expenses.

Musk’s Wealth Outpaces 475 S&P 500 Companies

To put his wealth into perspective, Musk could theoretically buy out companies in the S&P 500 with valuations smaller than his own, a list as big as 474 names.

Major corporations like Chevron , valued at $287 billion, and The Coca-Cola Company at $276 billion, are now "within reach" for Musk's personal fortune.

With $305 billion, Musk could also theoretically acquire three companies in the $100 billion range, like Prologis , Deere & Company and Lam Research Corporation , with cash to spare.

Read Next:

• S&P 500 Breaks 6,000 Points, Dow Soars Above 44,000, Small Caps Eye Strongest Week In 4 Years, Tesla Hits $1 Trillion: What’s Driving Markets Friday?

© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.

CNH Industrial (CNH) came out with quarterly earnings of $0.24 per share, missing the Zacks Consensus Estimate of $0.28 per share. This compares to earnings of $0.42 per share a year ago. These figures are adjusted for non-recurring items.

This quarterly report represents an earnings surprise of -14.29%. A quarter ago, it was expected that this truck, tractor and bus maker would post earnings of $0.38 per share when it actually produced earnings of $0.38, delivering no surprise.

Over the last four quarters, the company has surpassed consensus EPS estimates two times.

CNH, which belongs to the Zacks Manufacturing - Farm Equipment industry, posted revenues of $4.65 billion for the quarter ended September 2024, missing the Zacks Consensus Estimate by 2.61%. This compares to year-ago revenues of $5.99 billion. The company has topped consensus revenue estimates just once over the last four quarters.

The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call.

CNH shares have lost about 4.9% since the beginning of the year versus the S&P 500's gain of 24.3%.

What's Next for CNH?

While CNH has underperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock?

There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately.

Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions.

Ahead of this earnings release, the estimate revisions trend for CNH: unfavorable. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #5 (Strong Sell) for the stock. So, the shares are expected to underperform the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.

It will be interesting to see how estimates for the coming quarters and current fiscal year change in the days ahead. The current consensus EPS estimate is $0.34 on $5.55 billion in revenues for the coming quarter and $1.33 on $20.63 billion in revenues for the current fiscal year.

Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Manufacturing - Farm Equipment is currently in the bottom 7% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1.

Deere (DE), another stock in the same industry, has yet to report results for the quarter ended October 2024.

This agricultural equipment manufacturer is expected to post quarterly earnings of $3.90 per share in its upcoming report, which represents a year-over-year change of -52.8%. The consensus EPS estimate for the quarter has been revised 0.3% lower over the last 30 days to the current level.

Deere's revenues are expected to be $9.34 billion, down 32.4% from the year-ago quarter.

Zacks Investment Research

Donald Trump‘s 2024 presidential election win put several sectors in the spotlight, including alcohol stocks.

What Happened: Some people watched the outcome of election night on television from their home. Others likely scrolled along with social media on their phone. Some attended watch parties with friends and families, similar to a Super Bowl party or one for Nvidia's quarterly earnings.

Regardless of who voters wanted to win — Trump or Kamala Harris — they may have bought more alcohol for Election Day this year, at least in New York, with liquor stores reporting a busy day.

One liquor store told the New York Post they were three to four times busier than a regular weekday on Election Day with heavy sales coming in the early afternoon and around 5 p.m. ET. An employee from Brooklyn's Juice Box liquor store told the Post there was also a noticeable trend from many customers.

"People were buying sparkling wine and a bottle of liquor for both (outcomes)," the employee said.

Employees from other New York stores noticed the same trend. Customers were either buying one type of alcohol for a happy outcome or one for a negative outcome.

"I have no idea if people will be drowning their sorrows or celebrating," the Juice Box employee added.

Did You Know?

• Congress Is Making Huge Investments. Get Tips On What They Bought And Sold Ahead Of The 2024 Election With Our Easy-to-Use Tool

Why It's Important: While it is only one day of the year, Election Day 2024 could provide a short bump for alcohol stocks like Diageo Plc and Constellation Brands . Beer stocks like Anheuser-Busch InBev , Boston Beer Company and Molson Coors Beverage Company may have also benefitted from Election Day.

Alcohol may be a coping or celebratory item for Election Day in the U.S., but in India the country has dry days of no alcohol around their elections with residents unable to drink for 48 hours before the vote, on election day or as the vote is being totaled.

Read Next:

• Will Trump Be Sentenced In Hush Money Trial Or Will His ‘Criminal Problems Go Away’?

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© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.