Investor StrategyStockTop News

Deere sees sharp fall in annual profit as lockdowns sap demand

2 Mins read
imageStock Markets2 hours ago (May 22, 2020 10:15AM ET)

(C) Reuters. The leaping deer trademark logo is seen on John Deere equipment at a dealership in Taylor, Texas

By Ankit Ajmera

(Reuters) – Deere & Co (N:DE) on Friday topped quarterly sales and profit estimates and forecast a smaller-than-expected fall in farm equipment sales for the year, signaling a recovery in demand for its harvesters and tractors.

Shares of the company, which withdrew its outlook in March due to an escalating COVID-19 pandemic, rose as much as 4% in early trading.

Deere’s fresh forecast comes more than a month after President Donald Trump announced a $19 billion relief program to help U.S. farmers cope with the impact of the health crisis. The company’s sales were likely to benefit from the additional liquidity, analysts have said.

“Deere noted signs of stabilization (in farm equipment sales) despite the week farm sentiment,” said Jefferies (NYSE:JEF) analyst Stephen Volkmann, adding that fiscal 2020 North American sales outlook of a decline of 10% was “surprisingly benign”.

The company said it expects farm and turf equipment sales to fall between 10% and 15% this year. According to Jefferies, the midpoint is better than a 14% drop estimated by analysts.

Deere typically sees a pick-up in sales of farm equipment after January as farmers start planting fields. That likely helped second-quarter demand for farm machinery hold up better than sales of construction equipment.

It forecast 2020 profit in a range of $1.6 billion to $2 billion, down 39% to 51% from a year earlier.

In the quarter ended May 3, farm and turf machinery sales fell 18% to $5.97 billion and construction and forestry equipment sales dropped 25% to $2.26 billion.

Net income fell 41% to $666 million, or $2.11 per share in the quarter, but beat analysts’ average estimate of $1.62 per share, according to IBES data from Refinitiv.

Equipment sales declined 20% to $8.22 billion, topping expectation of $7.69 billion. (https://

Deere signals recovery as U.S. farmers to benefit from relief program

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

Related posts
StockTop News

Forex - Dollar Strengthens as U.S.-China Tensions Rise

2 Mins read
Forex4 hours ago (May 27, 2020 02:42AM ET) (C) Reuters. By Peter Nurse – The U.S. dollar bounced in early European…
StockTop News

Dollar Up on Back of Rising U.S.-China Tensions

1 Mins read
Forex6 hours ago (May 27, 2020 12:12AM ET) (C) Reuters. By Gina Lee – The dollar was up on Wednesday morning…
StockTop News

Yuan Drop Steepens Amid Speculation China Allowing Depreciation

1 Mins read
Forex6 hours ago (May 27, 2020 12:09AM ET) (C) Reuters. Yuan Drop Steepens Amid Speculation China Allowing Depreciation (Bloomberg) — China’s currency…
Get the daily email that makes reading the news actually enjoyable. Stay informed and entertained, for free.
Your information is secure and your privacy is protected. By opting in you agree to receive emails from us and our affiliates. Remember that you can opt-out any time, we hate spam too!

Leave a Reply

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