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Deere Earnings Down As People Postpone Their Buying Decisions

Deere has missed its earnings estimates for Q3, causing it to lower its earnings guidance for another year. It stated that farmers were now delaying their purchases due to the uncertainty surrounding the ongoing trade war. Deere reported EPS at around $2.71 a share, with total revenue at $8.97B. Analysts had been expecting an EPS of $2.85 and total revenue to reach $9.39B, as per Refinitiv estimates. The stock had fallen 13% during this month alone prior to this earnings report. Friday saw it gain 3.7%.

Rob Wertheimer from Melius Research stated that lowering guidance wasn’t a bad decision. Deere had also announced plans to increase their margins in a structural way. They were showing promise and setting a strategy, which was a sign of a good future. The firm has lowered its guidance for its 2nd consecutive quarter, stating that it expected sales to increase by 4% and net income to rise to $3.2B. The firm had expected an income of around $3.3B and a 5% jump in sales in May.

John Deere’s Q3 results report reflects the uncertainty prevalent in the agricultural industry, stated Samuel Allen, CEO and Chairman of the company. Crop conditions, short-term demand prevalence in commodities like soybeans and export market concerns have all forced farmers to delay their plans to purchase major equipment components. Allen stated that the general economic situation was positive, which was contributing to the sustainable results displayed by Deere’s forestry and construction business.

The US-China trade war has placed Deere under intense pressure from a variety of directions. The firm happens to be sensitive to prices of steel products as it needs steel to produce equipment. It sells its products to US farmers, who are currently under pressure themselves due to uncertainty in demand coming from China. Sales of equipment have fallen 3% compared to last year. Caterpillar, a fellow equipment manufacturer also missed its revenue and earnings estimates, causing it to lower its earnings guidance.

Arnold Miller
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EDITORIAL MANAGER At Global Market Journal

Arnold Miller is pro at explaining and presenting the business-related complex concept in a simple way. He has the ultimate skill of effectively writing down the news related to business mergers, political & financial affairs, acquisitions, and the latest business trends being followed by the globally established organizations. He also takes part in various surveys and key interviews with professionals, industry experts, and various organizations. He is also known for his immense knowledge of economics. Arnold had gained around 5 years of experience as a Business Analyst in a well-reputed production firm before choosing the field of Content Writing.

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