Deere raised its full-year outlook Friday after beating earnings and sales estimates for its fiscal third quarter. But Deere stock tumbled below key levels as investors worried about slower sales going ahead.
Deere Earnings
Estimates: Analysts expected Deere earnings to jump 33% to $8.22, according to FactSet. Revenue was seen growing nearly 9%, year over year, to $14.143 million.
Results: Earnings surged 66% to $10.20 per share. Sales rose 10% to $14.28 billion. That marked the lowest sales growth since Q2 2022.
Outlook: Deere guided 2023 net income guidance of $9.75 billion-$10 billion, up from $9.25 billion-$9.5 billion previously.
Prior to Q3 results, analysts expected EPS of $31.94 for the full year, up 37% from 2022, FactSet shows.
Deere Stock Sinks Near Buy Point
Shares of Deere sank 5.3% to 396.78 on the stock market today. Deere stock fell for a fourth straight day, undercutting its 50-day moving average as well as the 200-day line.
Deere stock is forming a handle with a 450 buy point after a long consolidation, the MarketSmith chart shows.
Caterpillar fell a fraction Friday. CAT stock is trading near highs after a breakout from a cup-with-handle base in July.
Slumping Crop Prices, Global Bellwether
On Friday, Deere raised its annual profit outlook, citing "positive fundamentals in the farm and construction sectors." It expects those fundamentals to fuel solid equipment demand.
But moderating crop prices signal a shifting market. So does the easing of supply chain challenges, which for several years squeezed equipment supplies and drove prices higher.
This week, corn futures declined to the lowest level since 2020.
Despite Deere's earnings beat-and-raise report, shares slid Friday amid questions about how long the tractor and farm boom can last.
Year to date, Deere stock is now down more than 7%, following a 25% advance in 2022.
The maker of agricultural and construction equipment sells worldwide, with particular strengths in Latin America and Europe.
Its products are closely linked to food and crop production, road-building, forestry and infrastructure projects, making it a bellwether for the global economy.
