Deere cuts full-year earnings forecast after profits miss estimates

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Deere & Co.'s third-quarter earnings on Friday missed Wall Street estimates, hurt by the U.S.-China trade war that has dented the demand for farm ...

CHICAGO: Deere & Co.'s third-quarter earnings on Friday missed Wall Street estimates, hurt by the U.S.-China trade war that has dented the demand for farm equipment, forcing the company to revise down its full-year profit and sales growth forecasts.

For the quarter ended July 28, the company reported an adjusted profit of US$2.71 per share, up 4.6per cent from a year earlier. That compared with Refinitiv IBES' average analyst estimate of US$2.85 per share.Sales at its agriculture & turf segment, which accounts for the bulk of the company's revenues, declined 6per cent year-on-year to US$5.95 billion in the quarter. Overall, equipment sales were down 3per cent.

"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," said Chief Executive Officer Samuel Allen. Deere now expects full-year net income of US$3.2 billion on annual sales growth of 4per cent, lower than the US$3.3 billion of income on sales up about 5per cent projected earlier.

The company now expects industry sales of agricultural equipment to be about the same as last year in the United States and Canada, which account for 60per cent of its overall business.

 

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