Deere’s Q2 Equipment Operations Revenue Reports 5.4% Growth



Deere’s second-quarter revenue

In the second quarter of fiscal 2019, Deere (DE) reported total revenue of $10.27 billion from its equipment operations, reflecting a rise of 5.4% year-over-year. In the second quarter of fiscal 2018, Deere reported revenue of $9.74 billion.

Deere continued the upward trend in its second-quarter revenue. Its second-quarter equipment operations revenue managed to beat analysts’ estimate of $10.18.

Deere’s equipment business growth was mainly driven by organic growth. Higher shipments and favorable pricing helped it report higher revenue. However, an unfavorable foreign currency exchange had a negative impact on Deere’s revenue.

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Management’s comments

Samuel R. Allen, Deere’s chair and CEO, said, “John Deere produced solid results for the quarter despite uncertain conditions in the agricultural sector. Ongoing concerns about export-market access, near-term demand for commodities such as soybeans, and a delayed planting season in much of North America are causing farmers to become much more cautious about making major purchases. At the same time, overall economic conditions remain positive, a fact that along with a growing customer base has contributed to strong results from our construction and forestry business.”


Deere expects the ongoing US-China trade war and delayed sowing to have an adverse impact on its revenue. As a result, Deere now expects its fiscal 2019 revenue to rise 5% compared to its earlier guidance of 7%.

Investors can hold Deere indirectly by investing in the VanEck Vectors Agribusiness ETF (MOO), which holds 7.0% in Deere. The fund also provides exposure to FMC (FMC), CNH Industrial (CNHI), and Tractor Supply (TSCO) with weights of 2.5%, 2.7%, and 3.6%, respectively, as of May 20.


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