Deere Q2 Earnings Decline 41% YoY, Issues Weak FY 2020 View

Deere Q2 Earnings Decline 41% YoY, Issues Weak FY 2020 View
May 25, 2020


Agriculture and construction machinery manufacturer Deere & Co (NYSE: DE) reported a 41% decline in the fiscal 2020 second-quarter net income – compared with last year. However, the company’s earnings and revenue surpassed Wall Street expectations. Deere also issued a fiscal 2020 outlook below the Street’s forecasts. Following the announcement of results, the stock lost 1.47% or 2.10 to close at $140.71.

The Moline, Illinois-based company posted second-quarter revenues of $9.253 billion, down 18% from $11.342 billion in the similar period last year. For the quarter ended May 3rd, 2020, Deere recorded Q2 earnings of $665.80 million, or $2.11 per share, compared with $1.135 billion, or $3.52 billion, in the year-ago period.

Analysts polled by FactSet had anticipated the farm equipment manufacturer to post earnings of $1.69 a share on revenues of $9 billion.

John May, chairman and CEO, expressed his happiness over the results: “Deere is well-known for developing strong relationships with a range of stakeholders, which prove extremely valuable in difficult times. We remain committed to offering a full suite of advanced digital tools that give our customers unique capabilities and help them do their work more efficiently and profitably. As a result, we’re confident the company will successfully manage the pandemic’s effects and strengthen its position serving customers in the future.”


  • Agriculture & Turf revenues fell 18% y-o-y to $5.968 billion
  • Construction & Forestry revenues were $2.256 billion, down 25% from $2.991 billion last year.

Sales in both segments fell primarily due to a drop in shipment volumes and the negative impact of currency exchange, partially negated by better price realization.

Deere’s financial services subsidiary, John Deere Capital Corporation (JDCC), posted revenues of $875 million, down 1% on a y-o-y basis.

Going forward, the company anticipates FY 2020 net income in the range of $1.6 billion to $2.0 billion, below the FactSet Consensus estimate of $2.04 billion.

For fiscal 2020, Deere’s worldwide sales of agriculture and turf equipment are anticipated to decrease between 10% and 15%, including a 2% negative impact of currency exchange rates. Similarly, the company’s worldwide sales of construction and forestry equipment are projected to decline between 30% and 40% in FY 2020, including a 2% negative impact of currency exchange rates.

Technically, the stock is trading below its 50-day moving average. Major resistance exists at 160 levels. The next support is anticipated only near 125 levels. Furthermore, the Chaikin money flow indicator has a negative reading. Therefore, we can anticipate the stock to move down in the short-term.

de - technical analysis - 25th May 2020

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Janine is our editor for related stock market news. Andrew and Janine will be focusing on providing the latest trends and where the next hit could be

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