Deere (DE) posted weaker-than-expected third-quarter earnings Friday and lowered its full-year sales and profit forecast as trade uncertainty surrounding the agricultural sector continues to hurt the farm equipment maker's bottom line.
Deere said earnings for the three months ended on July 28, the company's fiscal third quarter, came in at $2.71 a share, up 4.6% from the same period last year but 13 cents shy of the Wall Street consensus forecast. Group revenue, Deere said, fell 3% from last year to $10.03 billion and topped analysts' forecasts of a $9.38 billion tally.
Looking into 2019, Deere said it sees full-year equipment sales rising by 4%, down from a prior forecast of around 5%, while net income is forecast to come in at $3.2 billion, down from the company's earlier guidance of $3.3 billion.
"John Deere's third-quarter results reflected the high degree of uncertainty that continues to overshadow the agricultural sector," said CEO Sam Allen. "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."
"At the same time, general economic conditions remain positive and are contributing to strong results for Deere's construction and forestry business," he added.
Deere shares were up 3.17% to $148.26 in trading Friday.
"In spite of present challenges, the long-term outlook for our businesses remains healthy and points to a promising future," Allen said. "We continue to expand our global customer base and are encouraged by response to our lineup of advanced products and services."
"Furthermore, we are fully committed to the successful execution of our strategic plan focused on achieving sustainable profitable growth," he said. "In support of the strategy, we are conducting a thorough assessment of our cost structure and initiating a series of actions to make the organization more structurally efficient and profitable."