Deere Powers Through Q1 Despite Slumping Sales
Deere & Co. (NYSE: DE) reported fiscal first-quarter results before markets opened Wednesday morning. The heavy equipment manufacturer posted $1.63 in earnings per share (EPS) and $6.53 billion in revenue, which compared with consensus estimates of $1.26 in EPS on revenue of $6.42 billion. The same period of last year reportedly had EPS of $1.54 and $6.94 billion in revenue.
In terms of its segments, Deere reported that Agriculture & Turf sales decreased 4% year over year to $4.49 billion due to lower shipment volumes and the unfavorable effects of currency translation, partially offset by price realization. Construction & Forestry sales decreased 10% to $2.04 billion due to lower shipment volumes and the unfavorable effects of currency translation.
CEO John C. May commented:
John Deere’s first-quarter performance reflected early signs of stabilization in the U.S. farm sector. Farmer confidence, though still subdued, has improved due in part to hopes for a relaxation of trade tensions and higher agricultural exports. At the same time, activity in the construction sector has slowed leading to lower sales and profit for our Construction & Forestry division. Also impacting results in Deere’s construction equipment business were our actions to reduce factory production and lower inventories in response to current market conditions. Additionally, the quarter included costs of a voluntary employee-separation program, which is among the steps Deere is taking to improve flexibility and efficiency.
Deere stock traded up 8% early Friday at $179.17, in a 52-week range of $132.68 to $180.48. The consensus price target is $181.32.
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