The American farmer is on the mend
The worst may be over for farmers in the United States.
Deere on Friday reported earnings for its fiscal first quarter that easily topped Wall Street’s forecasts, and revenue fell by less than analysts had expected.
The tractor maker and bellwether for agriculture said the “US farm sector shows early signs of stabilization.” Net income rose 4% even though revenue was down 6%.
Deere’s sales have been battered in the past year due to trade tensions between the United States and China, with China launching several retaliatory tariffs aimed directly at agricultural products in America’s heartland, such as soybeans and pork.
But the trade truce between China and the Trump administration is good news for farmers — and Deere.
“Farmer confidence, though still subdued, has improved due in part to hopes for a relaxation of trade tensions and higher agricultural exports,” said Deere CEO John May in a statement.
The rebound in farming helped offset a slowdown in the company’s construction and forestry equipment division.
Investors may also be relieved to hear that Deere did not lower its profit outlook for 2020, despite worries about how the coronavirus outbreak in China could hurt demand. Shares of Deere soared nearly 10% in early trading.
COPYRIGHT 2020 BY KXLY. ALL RIGHTS RESERVED. THIS MATERIAL MAY NOT BE PUBLISHED, BROADCAST, REWRITTEN OR REDISTRIBUTED.