Agricultural machinery maker Deere & Co.'s adjusted net income for the fiscal second quarter ended April 28 missed analyst estimates, as the company lowered its guidance for sales and profitability.
Deere's net income for the fiscal second quarter fell 6% year over year to $1.14 billion, or $3.52 per share, from $1.21 billion, or $3.67 per share.
The company's adjusted net income for the quarter climbed 10% to $1.14 billion, or $3.52 per share, from the prior-year quarter's $1.03 billion, or $3.14 per share, falling short of the S&P Global Market Intelligence consensus normalized EPS estimate of $3.63.
Deere's shares declined 5% as of 11:30 a.m. ET.
Total net sales and revenues climbed 6% year over year to $11.34 billion, and total costs increased to $9.87 billion from $9.34 billion.
Net sales from the construction and forestry segment rose 11% to $2.99 billion from $2.70 billion, as higher shipment volumes and price realization were partially offset by the unfavorable effects of currency translation.
"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," said Samuel Allen, Deere's chairman and CEO.
For the six months ended April 28, 2019, the company's net income attributable to Deere & Co. climbed 143% to $1.63 billion, or $5.07 per share, from $673.2 million, or $2.05 per share, in the prior-year period.
The company revised its outlook for fiscal year 2019, now expecting net income to total approximately $3.3 billion from its initial forecast of approximately $3.6 billion.
In addition, it downwardly revised its outlook for net sales and revenues to an approximately 5% year-over-year rise compared with a previously projected 7% increase for the full fiscal year.
"Although the long-term fundamentals for our businesses remain favorable, softening conditions in the agricultural sector have led Deere to adopt a more cautious financial outlook for the year," Allen said.