Just a few weeks ago, smaller rival AGCO Corp. had actually raised its earnings guidance and boosted optimism that Deere would follow. Deere now expects net sales of agricultural and turf equipment to rise by just 2% this year, down from an earlier growth forecast of 4%. Currency swings are also a factor here, with Deere now predicting a 3% hit to its revenue in that unit from market fluctuations. In a presentation accompanying its earnings, Deere also shifted its economic forecast for total construction investment to flat versus a previous call for a gain. The biggest risk from the trade war isn’t what the tariffs do to raw-material costs – although the profit margin for Deere’s agricultural equipment unit was weak relative to analysts’ expectations – but what the uncertainty does to demand.

Source: Washington Post May 17, 2019 14:15 UTC