Deere Misses Expectations for Fiscal Third-Quarter Sales, Earnings Amid Agriculture Uncertainty

Deere & Co. (DE) reported results for its fiscal third quarter that missed the Street’s expectations as uncertainty in the agriculture sector amid the US-China trade war continues to weigh on sentiment, bringing a lowered outlook for full-year sales on Friday.

Net sales fell 3% to $8.97 billion, missing the consensus on Capital IQ for $9.38 billion. Earnings rose to $2.71 a share on an adjusted basis from $2.59 a share previously, while the Street was expecting $2.84 a share.

“John Deere’s third-quarter results reflected the high degree of uncertainty that continues to overshadow the agricultural sector,” said Chief Executive Samuel Allen. “Concerns about export-market access, near-term demand for commodities such as soybeans, and overall crop conditions, have caused many farmers to postpone major equipment purchases.”

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Total revenue and net sales, which includes the company’s financial services, fell 3% to $10.04 billion in the fiscal third quarter, the Moline, Ill.-based company said. Net sales and revenue in agriculture and turf fell 6% to $5.95 billion while construction and forestry was up 1% to $3.02 billion.

While the agriculture sector faces uncertainty, Allen said “general economic conditions remain positive and are contributing to strong results for Deere’s construction and forestry business.”

Still, the company said it now sees equipment sales increasing 4% for fiscal 2019, down from the 5% growth projection made in May. Net income attributable to Deere is forecast to be about $3.2 billion, lowered from $3.3 billion expected previously.