Deere Beats Expectations In Q1 But Disappoints On Outlook

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  • Deere reported its financial results for the first quarter on Thursday.
  • Here's what its CEO John C. May said in a press release today.
  • Deere stock is now down close to 8.0% versus its year-to-date high.

Deere & Co (NYSE: DE) is trading down in premarket on Thursday even though it reported solid results for its fiscal first quarter.
 

Deere stock down on muted future guidance

Investors are not content primarily because the management issued muted guidance for the future. Deere now forecasts its net income to come in between $7.50 billion and $7.75 billion.

Analysts, in comparison, were at $8.03 billion. Still, John C. May – the chief executive of Deere & Co said in a press release today:

 

We remain committed to empowering our customers through ongoing investment in the next-gen solutions as evidenced by our partnership on satellite communications to expand rural connectivity.

Deere attributed the weakness in its outlook to moderating demand due to falling crop prices and higher borrowing rates. Wall Street currently has a consensus “overweight” rating on Deere stock that pays a dividend yield of 1.53% at writing.
 

Deere Q1 earnings snapshot

  • Earned $1.75 billion versus the year-ago $1.96 billion
  • Per-share earnings also declined from $6.55 to $6.23
  • Revenue inched down 3.7% year-on-year to $12.19 billion
  • Consensus was $5.26 a share on $11.48 billion in revenue

DE saw an annualized decline of 7.0%, 9.0%, and 19% in its production and precision, construction and forestry, and small agriculture and turf sales in Q1, as per the earnings report. According to CEO May:

 

Deere’s Q1 performance underscores effectiveness of our Smart Industrial operating model and dedication of our workforce, enabling improved performance across economic cycles that surpasses historical benchmarks.


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