Key Takeaways
- Deere & Co. cut its full-year profit forecast for a second straight quarter Thursday on reduced demand for new farm equipment.
- The company lowered its prediction for sales of big farm machinery this year.
- Deere beat earnings and revenue estimates in its fiscal second quarter.
Shares of Deere & Co. (DE) fell in intraday trading Thursday as the manufacturer of big farm and construction equipment cut its profit forecast for a second consecutive quarter on limited demand for its machines.
The company now predicts full-year net income of $7.0 billion, down from its February estimate of $7.5 billion to $7.75 billion, which itself had been lowered from the November outlook of $7.75 billion to $8.25 billion. It also sees sales of large agricultural equipment sinking 20% to 25%, versus its previous expectation of about a 20% drop.
‘Continued Changes’ Across Agricultural Sector
Chief Executive Officer (CEO) John May explained that the Deere has been facing “continued changes across the global agricultural sector,” and is “proactively managing our production and inventory levels” to match demand.
The guidance news offset better-than-anticipated fiscal second-quarter results. The company reported earnings per share (EPS) of $8.53, with revenue down 12% year-over-year to $15.24 billion. Both exceeded the consensus estimate compiled by Visible Alpha.
Sales at its Production & Precision Agriculture division slumped 16% year-over-year to $6.58 billion. Its Small Agriculture & Turf unit sales plunged 23% to $3.19 billion, while Construction & Forestry segment sales were down 7% to $3.84 billion. The company noted that all three divisions were impacted by falling volumes.
Deere shares were down more than 3% to $400.45 as of about 10:15 a.m. ET. They are roughly flat for 2024.