Fannie Mae, Freddie Mac shares tumble after conservatorship comments
Investing.com - Deere & Co. has reported a 50% drop in net income and lower-than-anticipated net sales in its fiscal first quarter as the agricultural equipment maker grapples with inventory issues and broader market uncertainty.
Shares in the group were sharply lower in premarket U.S. trading on Thursday.
Moline, Illinois-based Deere (NYSE:DE) reported net income of $869 million in the three months ended on January 26, down from 1.75 billion in the corresponding period in 2024. Analysts had seen the figure at $848.7 million.
Net sales and revenues also sank by 30% to $8.51 billion. Stripping away finance and interest income and other sources of revenue, net sales stood at $6.81 billion, compared with projections of $7.67 billion.
In a statement, the company said the results reflected efforts to streamline its inventory levels "amidst uncertain market conditions."
Deere called the environment for its customers "challenging." Weighed down by the prospect of higher-for-longer interest rates and weaker farm incomes linked to a decline in soybean and corn prices in 2024, many farmers have been reining in expenditures on machinery -- leading dealers to limit inventory restocking.
Further clouding the economic outlook for farmers has been U.S. President Donald Trump’s recent tariffs, with several items like soybeans, corn and wheat potentially exposed to retaliatory levies from China, Canada and Mexico.
Trump has already slapped a 10% tariff on imported goods from China, drawing countermeasures from Beijing. Separate duties on Canada and Mexico have also been announced, but Trump delayed them after he received promises from the two countries around tightening border security.
Deere, the world’s biggest farm equipment manufacturer, reiterated its guidance for net income in 2025 of $5 billion to $5.5 billion. Production and precision agriculture sales are tipped to fall by 15% to 20%, while revenue at its small agriculutral and turf segment is seen decreasing by around 10%. Construction and forestry equipment sales are expected to drop by 10% to 15%.