Deere & Company (DE.US) stock tumbles more than 12.0% during today's session after the agricultural machinery and heavy equipment maker reported mixed quarterly results. Company earned $6.81 per share, up 19.9% from the same period last year and above analysts’ estimates of $6.71 per share as higher crop prices have a positive impact on demand. Company lifted its annual guidance despite revenue figures that came in below analysts’ estimates.
"Deere's second-quarter performance reflected a continuation of strong demand even as we face supply-chain pressures affecting production levels and delivery schedules," said CEO John May.
Agricultural division jumped 13% YoY, however operating profit margins in the segment fell almost 2.0% to about 20%.
Overall profit margins of equipment segments increased around 0.4%YoY.
For the full fiscal year, the company expects net income in the region from $7 billion to $7.4 billion, which is significantly higher compared to previous projections of $6.7 billion to $7.1 billion, with solid demand for farm and construction equipment, increased infrastructure spending and favorable crop prices.
Given the optimistic financial outlook, rising food prices and the prospect of food shortages in many places around the world, it appears that the investors' response may be somewhat exaggerated, and today's declines are largely driven by the overall negative sentiment prevailing in the markets.
Start investing today or test a free demoOpen real account TRY DEMO Download mobile app Download mobile app
Deere & Company (DE.US) stock fell nearly 30.0% from its all-time high at 446.45 and is currently testing major support at $315.20 which coincides with 38.25 Fibonacci retracement of the upward wave launched in March 2020. Should break lower occur, next target for sellers is located around $280 level, which is marked with previous price reactions. Source: xStation5
The content of this report has been created by XTB S.A., with its registered office in Warsaw, at Prosta 67, 00-838 Warsaw, Poland, (KRS number 0000217580) and supervised by Polish Supervision Authority ( No. DDM-M-4021-57-1/2005). This material is a marketing communication within the meaning of Art. 24 (3) of Directive 2014/65/EU of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments and amending Directive 2002/92/EC and Directive 2011/61/EU (MiFID II). Marketing communication is not an investment recommendation or information recommending or suggesting an investment strategy within the meaning of Regulation (EU) No 596/2014 of the European Parliament and of the Council of 16 April 2014 on market abuse (market abuse regulation) and repealing Directive 2003/6/EC of the European Parliament and of the Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC and Commission Delegated Regulation (EU) 2016/958 of 9 March 2016 supplementing Regulation (EU) No 596/2014 of the European Parliament and of the Council with regard to regulatory technical standards for the technical arrangements for objective presentation of investment recommendations or other information recommending or suggesting an investment strategy and for disclosure of particular interests or indications of conflicts of interest or any other advice, including in the area of investment advisory, within the meaning of the Trading in Financial Instruments Act of 29 July 2005 (i.e. Journal of Laws 2019, item 875, as amended). The marketing communication is prepared with the highest diligence, objectivity, presents the facts known to the author on the date of preparation and is devoid of any evaluation elements. The marketing communication is prepared without considering the client’s needs, his individual financial situation and does not present any investment strategy in any way. The marketing communication does not constitute an offer of sale, offering, subscription, invitation to purchase, advertisement or promotion of any financial instruments. XTB S.A. is not liable for any client’s actions or omissions, in particular for the acquisition or disposal of financial instruments, undertaken on the basis of the information contained in this marketing communication. In the event that the marketing communication contains any information about any results regarding the financial instruments indicated therein, these do not constitute any guarantee or forecast regarding the future results.