Deere & Co. (DE) - Get Report posted stronger-than-expected third quarter earnings Friday, and improved its full-year forecasts, as cost cutting and stabilizing farm sales supported the industrial equipment group's bottom line.
Deere said adjusted earnings for the three months ending on August 2 were pegged at $2.57 per share, down 8.5% from the same period last year but firmly ahead of the Street consensus forecast of $1.25 per share . Group revenues, Deere said, fell 11% from last year to $8.925 billion, again besting analysts' forecasts of a $6.703 billion tally.
Looking into the end of the 2020 fiscal year, Deer said it sees worldwide agriculture and turf equipment sales falling 10% from last year's levels, a more positive forecast than it issued following second quarter earnings in May. Construction and forestry equipment sales, Deere said, are likely to fall 25%, but again that's a much better reading than the 40% slump forecast in the spring. Overall net income, Deere said, is likely to come in at $2.25 billion compared to a May forecast of between $1.6 billion and $2 billion.
“As we manage through the pandemic, Deere’s number-one priority continues to be safeguarding the health and well-being of its employees," said CEO John May. "Thanks to aggressive measures taken early in the crisis, we have had success keeping our employees safe, our factories and parts centers functioning, and our customers served.”
“Although unsettled market conditions and related customer uncertainty are expected to have a moderating effect on key markets in the near term, we believe Deere is well-positioned to help make our customers more profitable and sustainable,” May added. “In addition, we are encouraged by the early benefits we are experiencing from the company’s recently launched smart-industrial operating model. We’re confident it will help accelerate our ability to deliver differentiated solutions to our customers, while contributing to improved efficiencies across the company.”
Deere shares were marked 4.4% higher in early trading following the earnings release to change hands at $199.69 each, a move that would extend the stock's year-to-date gain to around 15.5%.