Deere & Co. Stock Falls As Tariffs Impact Earnings

The stock of Deere & Co. (DE) is down 7% after the maker of John Deere tractors and lawnmowers lowered its guidance due to tariff impacts.The company known for its distinctive green and yellow farm equipment reported earnings per share (EPS) of $4.75 U.S. on sales of $10.4 billion U.S. The results were better than Wall Street forecast of $4.58 U.S. in earnings and revenue of $10.3 billion U.S. Despite the top- and bottom-line beats, Deere’s agricultural and construction equipment business saw sales decline for a third consecutive quarter, marking a slowdown at the company. Deere’s guidance also disappointed. Management said they expect net income guidance for the entire fiscal year of $5 billion U.S., down from $5.25 billion U.S. previously and below analysts’ consensus expectation. Deere executives also said that tariffs increased product costs in the latest quarter, though they didn’t say by how much.Equipment purchases from Deere & Co. are falling as farmers’ incomes decline due to depressed crop prices. The price of corn averaged roughly $6.50 U.S. a bushel in 2022 compared with $4 U.S. over the last 12 months.Deere said it needs to overcome high inventory levels with dealers. The company says it has been working to reduce new and used inventory at dealers for months. Prior to today (Aug. 14), DE stock had risen 23% this year to trade at $513.54 U.S. per share.