Deere & Company (NYSE:DE, XETRA:DCO) reported quarterly results that came in ahead of Wall Street expectations for both sales and profit, even as weakness in agricultural equipment demand continued to weigh on its core farm machinery business.
For the fiscal second quarter ended May 3, the company posted earnings per share of $6.55, slightly below $6.64 in the same period a year earlier but above analyst expectations of $5.70
Net income was $1.77 billion, compared with $1.80 billion a year ago. Worldwide net sales and revenues rose 5% to $13.37 billion, also ahead of consensus estimates of $11.56 billion. Despite the stronger-than-expected performance, Deere left its annual net income forecast unchanged, signaling it still anticipates a challenging environment in the second half of the year.
Sales of large farm equipment declined 14% during the quarter, reflecting continued pressure in the agricultural sector. Weak crop prices and elevated input costs, including fertilizer, fuel and other production expenses, have reduced farm incomes and weighed on demand for tractors, combines and related machinery. On a segment basis, Deere said strength in its Small Agriculture & Turf and Construction & Forestry businesses helped offset softness in its large agriculture equipment division.