Shares of farm equipment maker
tumbled more than 12% Wednesday after the company posted fiscal third-quarter earnings that fell short of the Street's targets and offered a weak outlook.
The Moline, Ill., company said net income in the quarter rose to $575.2 million, or $1.32 a share, from $537.2 million, or $1.18 a share, in the year-ago period. On average, analysts expected Deere to notch a profit of $1.36 a share, according to Thomson Reuters.
Deere said revenue in the quarter increased 17% from a year ago to $7.74 billion, which handily topped forecasts for revenue of $7.22 billion.
Looking ahead, Deere said escalating raw material costs "are expected to have an impact on margins for the fiscal fourth quarter." Deere said it expects net income to be about $425 million next quarter, compared with the Thomson Reuters average estimate of $491 million.
The company also said equipment sales are projected to increase by about 21% for the full year and 29% for the fiscal fourth quarter. Included in the forecast is about 5% of currency translation impact for the year and about 3% for the quarter.
"Though agricultural commodity prices have moderated, they remain quite favorable by historical standards and are continuing to provide strong support to farm incomes and to the sale of productive farm machinery worldwide," said Chairman and CEO Robert Lane. "Deere's entire business lineup is benefiting from the consistent execution of our plans to rigorously manage costs and assets and create a more resilient company overall. Our non-agricultural operations have remained on a profitable course as a result, in spite of the economic downturn in the United States."
Deere shares hit a low of $60.99 in morning trading, but more recently were sliding $6.15, or 8.9%, to $63.20. Among its rivals,
was down 3.7% and
was losing 4.1%.