Deere shares slide as profit, 2009 view disappoint

Puntúa la noticia :

Nota de los usuarios: - (0votos)

• Bolsa, mercados y cotizaciones
• Empresas y finanzas
• Telecomunicaciones y tecnología

Share

Tweet

elEconomista.es en Twitter

Follow @eleconomistaes

EcoTablet - ¡Gratis en App Store!

La plataforma más completa de información y servicios económicos para iPad.

• Suscribirse al boletín
• Imprimir
• Enviar
• Aumentar texto
• Reducir texto
• Haga doble click sobre una palabra para ver su signifcado
• Sudoku: Juega cada día a uno nuevo
• El tiempo: Consulta la previsión para tu ciudad

By Nick Zieminski

NEW YORK (Reuters) - Deere & Co , the world's biggest farm equipment maker, posted a lower-than-expected quarterly net profit on Wednesday and provided a 2009 earnings forecast that was well below Wall Street estimates, sending shares down as much as 13 percent in early trading.

The company reported sharply higher machinery sales, but said a stronger dollar and a higher tax rate reduced the profitability of its equipment operations. It expects flat equipment sales in 2009, adding its outlook was highly uncertain.

Since Deere's quarter included all of October, its results do not bode well for other U.S. industrial names, said Brian Langenberg, principal of research and asset management firm Langenberg & Co., who follows the industrial sector.

"The credit markets really started to hit the operating results of the entire industrial sector in late September, he said. "It's going to show up in the fourth quarter results of most companies."

Deere, along with peers Agco Corp and CNH Global NV , have enjoyed strong demand from farmers in recent quarters, but a recent pullback in commodity prices and tough credit conditions have raised questions about how long the boom can continue.

Deere expects 2009 net income of about $1.9 billion, down from the $2.05 billion in earned for the full fiscal year just ended.

That translates to 2009 earnings of about $4.45 per share, Langenberg said. Current Wall Street expectations are for 2009 profit of $5.48 per share, according to Reuters Estimates.

"I don't think that's an in-the-bag number, given what's going on in the world," Langenberg said. "Consensus has to come down dramatically."

"Volumes are going to go down, and I think they will go down more than people think," Langenberg added. Deere will also face a headwind from a stronger U.S. dollar, while lower commodity prices will both affect agricultural demand and hurt the company's pricing, he added.

"There's nothing good here," Langenberg said.

LOWER PROFIT

Net earnings fell 18 percent to $345 million, or 81 cents per share, in the fiscal fourth quarter ended Oct 31, compared with $422.1 million, or 94 cents per share a year earlier.

The results included $50 million, or 8 cents per share, in expenses for the closing of a plant but even without that cost, earnings were below the 99 cents per share expected.

Total revenue was up 21 percent to $7.4 billion, while equipment sales rose 24 percent to $6.74 billion, below Wall Street forecasts for sales of $6.84 billion.

Demand for commercial and consumer equipment weakened as did profit in its financial services,

Deere shares were down by about two-thirds from their 52-week high before Wednesday's slide, on concerns that demand will not improve in 2009.

Wachovia analyst Andrew Casey downgraded Deere shares to "market perform" from "outperform."

"While Deere has come under significant selling pressure, we are decreasing our rating due to a likelihood that the stock has limited upside potential from current levels in the intermediate term," he wrote in a note to clients.

In early trading, Deere shares were down $2.93 or 9 percent at $30.17 on the New York Stock Exchange, after falling to an intraday low of $28.87. Agco lost 9 percent to $22.10 and CNH fell 4 percent to $13.99.

(Reporting by Nick Zieminski; Editing by Derek Caney)

PUBLICIDAD

- Recibe nuestros análisis Diarios sobre Divisas, Acciones y Opciones. ¡Apúntate ya! ¡Es GRATIS!

- Opere en más de 8.000 CFDs. Infórmese y obtenga su CFD Trading Guide

- Nuevos spreads en materias primas: Oro tan sólo 0,3 puntos, Plata 0,25, Petróleo 0,35

- Opera desde 2,95 € en tiempo real con Self Bank.