Zacks Industry Outlook Highlights: Deere & Company, Caterpillar, CNH Global, AGCO and Kubota
CHICAGO, Jan. 25, 2013 /PRNewswire/ -- Today, Zacks Equity Research discusses the U.S. Machinery, including Deere & Company (NYSE:DE), Caterpillar Inc. (NYSE:CAT), CNH Global NV (NYSE:CNH), AGCO Corporation (NYSE:AGCO) and Kubota Corporation (NYSE:KUB).
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A synopsis of today's Industry Outlook is presented below. The full article can be read at
Link: http://www.zacks.com/commentary/25548/machinery-industry-stock-outlook-jan-2013
A world economic recovery, as witnessed from equity market improvements of the lows experienced since the 2008 global crisis, has been quite impressive. The journey was difficult with ever-present headwinds hindering growth, the most recent of which was the Eurozone debt crisis that significantly slowed down the overall growth pace in 2011 and 2012.
According to the World Economic Outlook Update published by the International Monetary Fund (IMF) in January 2013, the world economy is projected to grow 3.5% in 2013 (versus 3.6% projected in October 2012) and 4.1% in 2014. Growth in advanced economies and emerging and developing countries are projected at 1.4% (versus 1.5% expected earlier) and 5.5% (versus 5.6% expected earlier) in 2013, respectively. In 2014, advanced economies are projected to grow 2.2% and emerging markets 5.9%.
No doubt obstacles still persist as can be deduced from an unstable European economy and slowly reviving advanced countries that in turn are affecting emerging markets and developing economies; the overall growth picture may not materially deteriorate from the IMF's January 2013 forecast.
Demand for the Machinery industry is correlated to increasing economic activity, which stimulates demand for industrial products, thereby increasing the need for new/advanced machinery. The major end-markets for the machinery industry include agriculture, construction, mining and energy industries, among others.
Important Players of the Machinery Industry
Deere & Company's
) fiscal fourth quarter and year 2012 (ended October 31, 2012) results were impressive. For the year and the quarter, equipment sales rose roughly 14%, with price realization contributing 4%. The agricultural and forestry equipment provider is expanding globally to leverage benefits from the growing global farm industry.
For fiscal year 2013 equipment sales are expected to grow 5% year over year and for the first quarter by 10%. Net earnings for 2013 are projected to be approximately $3.2 billion.
Caterpillar Inc.
) posted a 5% increase in equipment sales in the third quarter of 2012. For the year 2013, the company expects modest improvements in U.S. and China along with other major developing countries while conditions in Europe are expected to be difficult. Revenue growth in 2013 is expected to be within the (5%) to 5% range.
Italy-based CNH Global NV (NYSE:CNH) posted a 5% to 11% year-over-year increase on a constant currency basis in its equipment sales (agricultural and construction) in the third quarter of 2012.
Other top players in the agricultural, construction and mining industry includes:
AGCO Corporation
) and
Kubota Corporation
), among others.
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