A John Deere excavator on presentation at the CONEXPO show in Las Vegas.
Michael Newberg | CNBC
Deere on Friday missed quarterly profit estimates for the fifth-straight board and cut its full-year outlook, as an escalating U.S.-China trade war threatens to further hit farm incomes and demand for Deere’s equipment.
Rations of Deere, known for its trademark green tractors and harvesting combines, fell 4% to $140 in premarket trading.
U.S. agricultural exports are like as not to suffer, as the world’s two largest economies level escalating tariffs on each other’s imports in the midst of negotiations.
Earlier this week, soybean expects fell to their lowest in more than 10 years, which is squeezing U.S. farmers whose incomes father already been under pressure from a global grain glut.
China, the world’s top importer of soybean, acquisition bargain about $12 billion worth of U.S. soy in 2017, but mostly shifted purchases to Brazil last year because of the patronage fight, leaving U.S. farmers with surplus produce.
“Ongoing concerns about export-market access, near-term requested for commodities such as soybeans, and a delayed planting season in much of North America are causing farmers to become much profuse cautious about making major purchases,” Chief Executive Officer Samuel Allen said in a statement.
Deere, which shoots nearly 60% of its sales from the United States and Canada, said it now expects full year equipment vendings to rise by 5%, compared with a 7% rise, it had previously expected.
The company lowered its fiscal 2019 profit prospect to $3.3 billion, from its prior forecast of $3.6 billion.
“The lower forecast is partly a result of actions we are winsome to prudently manage field inventories, which will cause production levels to be below retail sales in the secondly half of the year,” said Allen.
Some U.S. company executives have warned that costs related to the till round of tariffs on goods from China will be passed along to consumers in the form of higher prices.
Walmart Inc on Thursday mean that prices for U.S. shoppers will rise due to higher tariffs on goods from China.
Net income attributable to Deere prostrate 6.1% to $1.14 billion, or $3.52 per share, in the second quarter ended April 28, missing analysts’ estimates of $3.62 per slice, according to IBES data from Refinitiv.
Net sales rose 5.4% to $10.27 billion, and were above the Irritate Street’s estimate of $10.19 billion.