Zacks Industry Outlook Highlights: Deere, Caterpillar, AGCO, Toro and Terex
CHICAGO, Jan. 17, 2014
CHICAGO, Jan. 17, 2014 /PRNewswire/ --Today, Zacks Equity Research discusses
the Machinery, including Deere & Company (NYSE:DE-Free Report), Caterpillar
Inc. (NYSE:CAT-Free Report), AGCO Corporation (NYSE:AGCO-Free Report),Toro Co.
(NYSE:TTC-Free Report) and Terex Corp. (NYSE:TEX-Free Report).
The direct correlation between increasing economic activities and the
prospects of the machinery industry evokes in us a confidence in the industry
right on the heels of anticipated economic growth worldwide.
Recovery, though gradual, from the 2008 global crisis has raised demand for
industrial products and has in turn boosted the need for new/advanced
machinery. The major end-markets for the machinery industry include
agriculture, construction, mining and energy industries, among others.
The world economy will likely grow by 3.6% in 2014, according to the
International Monetary Fund's (IMF) World Economic Outlook, published in Oct
2013. Growth in advanced economies and emerging and developing countries are
projected at 2.0% and 5.1% for 2014, respectively.
The world economic growth projection was a slight moderation from what was
predicted by the IMF in Jul 2013 due primarily to weak demand and
slower-than-anticipated growth in emerging markets. Admittedly obstacles still
persist but the overall growth picture may not materially deteriorate or
deviate from the IMF's Oct 2013 forecast.
Important Players in the Machinery Industry
Deere & Company's (NYSE:DE-Free Report) fiscal 2013 (ended Oct 31, 2013)
results were impressive. For the fiscal year, equipment sales rose roughly 4%,
with price realization contributing 3%. This agricultural and forestry
equipment provider is expanding globally to leverage benefits from the growing
global farm industry.
Management anticipates equipment sales to decrease 3% year over year in fiscal
year 2014. Net earnings for the year are projected to be approximately $3.3
Caterpillar Inc. (NYSE:CAT-Free Report) posted a 19% decline in Machinery and
Power Systems sales in the third quarter of 2013. For 2013, the company
expects revenue to be approximately $55 billion, down from the $56–$58 billion
range expected earlier due primarily to weak demand for mining equipment. The
company is slated to report its fourth quarter results on Jan 27, 2014.
Other top players in the agricultural, construction and mining industry
include AGCO Corporation (NYSE:AGCO-Free Report),Toro Co. (NYSE:TTC-Free
Report) and Terex Corp. (NYSE:TEX-Free Report), among others.
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