Deere Earnings Preview: Will the Company Beat Estimates?

No one wants to see such an enormous decline, but it can't be helped. We're still in an economy reset, after all, so you've got to be patient with these kinds of macro-sensitive businesses.

Last time around, Deere beat estimates by a wide margin. I'm thinking management will be able to repeat that performance and deliver a better-than-expected number.

Then again, I'm not about to initiate a trade ahead of the release. Why? Simple: The stock hasn't been too robust over the year-to-date frame. Granted, you could make an argument that all the major markets have been choppy and that Deere's equity is merely reflecting the new bearish stance on Wall Street; in other words, the shares might now be in a position to pop from a good report.

I'm not willing to take the chance. I'd rather sit on the sidelines and see what happens. Besides, who knows if the market is in the mood to head back below 10,000 this week? If it happens on Wednesday (I'm not making a prediction, just speculating on outcomes), I don't think I would want to be in Deere on the whim of a bet.

If you're in the stock long-term, I doubt you'll have too much to fret over. Sure, you might read cautious statements from management regarding the health of the global economy, but perhaps the statement of cash flows will act as an agent of encouragement. Even if cash is used for operations, as it was in the year-ago quarter, it's conceivable that a lesser amount of money was needed for operating activities.

Don't worry, though: If you own Deere for the dividend, this is just the first of four fiscal quarters. The company has time to generate the cash. For now, everyone is counting on a beat. We'll soon find out.

Disclosure: I don't own any company mentioned; positions can change without notice.