People look at Deere equipment as they attend National Farm Machinery show in Louisville, Kentucky, February 11, 2016. REUTERS/Meredith Davis
(Reuters) – Deere & Co on Friday reported a lower-than-expected quarterly profit and cut its full-year outlook, as an escalating trade war between the United States and China threatens to hit U.S. exports of key commodities, hurting farm incomes and demand for Deere’s equipment.
Shares of Deere, known for its trademark green tractors and harvesting combines, fell 2.7% to $142 in premarket trading.
“Ongoing concerns about export-market access, near-term demand for commodities such as soybeans, and a delayed planting season in much of North America are causing farmers to become much more cautious about making major purchases,” Chief Executive Officer Samuel Allen said in a statement here
Deere said it now expects full year equipment sales to rise by 5 percent, compared with a 7 percent rise, it had previously expected.
The company lowered its fiscal 2019 profit outlook to $3.3 billion, from its prior forecast of $3.6 billion.
Net income attributable to Deere & Co fell to $1.14 billion, or $3.52 per share, for the second quarter ended April 28, from $1.21 billion, or $3.67 per share, a year earlier.
Net sales rose 5.4 percent to $10.27 billion.
Analysts, on average, had expected quarterly profit of $3.62 per share and revenue of $10.19 billion, according to IBES data from Refinitiv.
Reporting by Ankit Ajmera in Bengaluru; Editing by Shailesh Kuber