Deere beats expectations in Q1 but disappoints on outlook

Deere & Co (NYSE: DE) is trading down in premarket on Thursday even though it reported solid results for its fiscal first quarter.

Deere stock down on muted future guidance

Investors are not content primarily because the management issued muted guidance for the future. Deere now forecasts its net income to come in between $7.50 billion and $7.75 billion.

Analysts, in comparison, were at $8.03 billion. Still, John C. May – the chief executive of Deere & Co said in a press release today:

Deere attributed the weakness in its outlook to moderating demand due to falling crop prices and higher borrowing rates. Wall Street currently has a consensus “overweight” rating on Deere stock that pays a dividend yield of 1.53% at writing.

Deere Q1 earnings snapshot

• Earned $1.75 billion versus the year-ago $1.96 billion
• Per-share earnings also declined from $6.55 to $6.23
• Revenue inched down 3.7% year-on-year to $12.19 billion
• Consensus was $5.26 a share on $11.48 billion in revenue

$DE saw an annualised decline of 7.0%, 9.0%, and 19% in its production and precision, construction and forestry, and small agriculture and turf sales in Q1, as per the earnings report. According to CEO May: