Deere rises after tractor-maker reports better-than-expected earnings, says farming stabilizing

A Deere & Co. John Deere 9560 combine harvester unloads soft red winter (SRW) wheat during a harvest in the village of Kirkland in Dekalb, Illinois, July 9, 2018.

Daniel Acker | Bloomberg | Getty Images

Shares of Deere spiked Friday morning after the agriculture company topped estimates for its fiscal first quarter and said the farming sector in the United States is starting to stabilize. 

The company reported $1.63 in adjusted earnings per share and $6.53 billion of revenue for the quarter. Analysts expected $1.25 in earnings per share and $6.409 billion of revenue, according to Refinitiv. The stock was up more than 6% to $176.50 per share in premarket trading.

“John Deere’s first-quarter performance reflected early signs of stabilization in the U.S. farm sector,” CEO John May said in a statement. 

Deere and other major agriculture companies have been hit by the trade war between the U.S. and China, which has made farmers unsure of how large the market for their products will be. 

Sales in the company’s agriculture and turf segment were down 4% compared with the same quarter last year, but operating profit rose 7% segment. The company said operating profit grew in part due to lower production costs.

The company said it expects net income of between $2.7 billion and $3.1 billion for the full year. It did not change its guidance for agriculture and turf equipment sales, which includes a 5% decline in the United States and Canada.

Friday’s sharp increase represents a turnaround for the stock, which had been down more than 4% so far this year. The stock is within a few percentage points of its 52-week high at $180.48 per share.

Deere suffered sales and profit declines in its construction and forestry segment for the quarter, and the company said it expects those to be down 10 to 15% for the year. 

Products You May Like

Articles You May Like

The market is so haywire some Wall Street strategists threw in the towel on giving S&P 500 targets
Mortgage bankers warn Fed mortgage purchases unbalanced market, forcing margin calls
NY shop Russ & Daughters survived Spanish flu, but coronavirus is ‘uncharted waters’
Six messages to reassure kids when COVID-19 hits your family financially
If Congress doesn’t act now on a coronavirus aid package, BTIG’s Julian Emanuel sees stocks plunging another 20%

Leave a Reply

Your email address will not be published. Required fields are marked *