Deere Beats Profit Targets as Strong Pricing, Cost Cuts Counter Slow Demand
Q3 Earnings
WEB Deere Co (DE) beat analysts' expectations for third-quarter profit on Thursday as stronger pricing and cost cuts offset slowing demand.
The company reported a net income of $1.73 billion, or $6.29 per share, for its third quarter, compared with $2.86 billion, or $10.54 per share, in the same period last year. Revenue for the quarter was $11.2 billion, up from $10.2 billion a year earlier.
Analyst Expectations
Analysts had expected Deere to report earnings of $5.59 per share on revenue of $10.9 billion, according to Refinitiv data.
- Earnings per share: $6.29 vs. $5.59 expected
- Revenue: $11.2 billion vs. $10.9 billion expected
Demand Slowdown
Despite the strong earnings, Deere said that it is seeing a slowdown in demand for its products due to the uncertain economic outlook.
The company lowered its full-year profit forecast for the second time, now expecting net income of $7.0 billion to $7.2 billion, down from its previous forecast of $7.5 billion to $8.0 billion.
Cost-Cutting Measures
To offset the slowdown in demand, Deere is implementing cost-cutting measures, including job cuts.
The company said it would cut an unspecified number of production and salaried jobs, but did not provide details.
Conclusion
Deere's strong third-quarter earnings show that the company is still benefiting from the strong pricing environment in the agricultural sector. However, the company is facing headwinds from the slowing economy, which is likely to weigh on demand for its products in the coming months.
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