What does gross margin mean?

How much of every sales dollar is left after the direct cost of what was sold.

How do you interpret gross margin?

Higher and stable gross margins indicate pricing power and a durable cost structure. A declining trend signals input-cost pressure, pricing competition, or a shift toward lower-margin products.

How does gross margin compare across companies?

Highly comparable within an industry, less so across industries — software runs 70%+ while distributors run in single digits. Track the trend more than the absolute level across sectors.

Deere & Company DE Gross margin

Discontinued — last reported Q3 '18

Gross margin at other companies

CaterpillarCAT

96.6%-4.4pp

CortevaCTVA

46.1%+2.6pp

Tractor Supply CompanyTSCO

36.4%+0.1pp

PaccarPCAR

19.9%-2.0pp

Ford Motor CompanyF

13.4%-0.1pp

International Business MachinesIBM

58.4%+1.3pp

Other financials

Income statement

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Revenue$13.4B+4.8%

Net income$1.8B-1.7%

EPS (diluted)$6.55-1.4%

Balance sheet

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Cash & equivalents$7.9B-1.1%

Total debt$58.2B-1.4%

Total equity$27.4B+12.8%

Total assets$107.00B+0.7%

Cash flow

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Operating cash flow$1.9B+13.7%

CapEx$195.0M-3.9%

Free cash flow$1.7B+16.0%

Valuation

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Market cap$158.85B+6.0%

Enterprise value$209.18B+4.0%

P/E33.2×+6.7×

P/S3.4×+0.1×

Profitability

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Net margin10.1%-2.3pp

Returns & leverage

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Return on equity18.5%-5.6pp

Debt / equity2.1×-0.3×

Where this comes from

Calculated from Deere & Company’s reported figures.

gross profit/total revenue=31.4%

Based on trailing twelve months.

The official record: Deere & Company’s 10-Q, filed August 29, 2019, on SEC EDGAR. View the filing →

Questions, answered.

What does gross margin mean?: How much of every sales dollar is left after the direct cost of what was sold.
How do you interpret gross margin?: Higher and stable gross margins indicate pricing power and a durable cost structure. A declining trend signals input-cost pressure, pricing competition, or a shift toward lower-margin products.
How does gross margin compare across companies?: Highly comparable within an industry, less so across industries — software runs 70%+ while distributors run in single digits. Track the trend more than the absolute level across sectors.