John Deere earnings down in second quarter

May 24, 2016

Company calling for nine per cent sales decline

By Diego Flammini
Assistant Editor, North American Content
Farms.com

John Deere’s second-quarter earnings are down compared to last year.

According to the company’s May 20 release, second-quarter earnings came in at $495.4 million, compared to $690.5 million at the same time in 2015.

John Deere’s first quarter earnings were also down; $749.8 million in 2016 compared $1.077 billion at the same time in 2015.

Company executives said the lower numbers are a reflection of the current agriculture industry.

“John Deere’s second-quarter performance reflected the continuing impact of the downturn in the global farm economy,” Samuel R. Allen, chairman and CEO said in a release; he also noted a weakness in the construction equipment sector.

Going forward, the company projects a decrease of approximately eight per cent in agriculture and turf equipment sales, including a 15 to 20 per cent decrease in Canada and the United States.

The company said the decline is reflective of “the impact of low commodity prices and stagnant farm incomes, (and) is expected to be most pronounced in the sale of higher-horsepower models.”

Despite the projected declines, Allen said the company is performing “at a much higher level than in previous downturns.”

For 2016, John Deere expects its net income to be about $1.2 billion.

Video: Is China Buying US Soybeans + USDA Nov 14th Crop Report could be “Game Changing”

After a week of a U.S./China trade truce, markets/trade is skeptical that we have not seen a signed agreement nor heard much from China or seen any details. There are rumors that China is buying soybean futures & not the physical. Trust in Trump?
12 MMT of U.S. soybean purchases by China by year-end is better than 0 but we all need to give it more time and give it a chance to unfold. China did lower the tariffs on Ag and is buying U.S. wheat and sorghum.
U.S. supreme court could rule against Trumps tariffs, but the Trump administration does have a plan B.
U.S. government shutdown is now the longest in history at 38 days.
But despite a U.S. government shutdown we will be getting a USDA November crop report next Friday and it could be “game changing.” If the USDA provides a bullish surprise with lower U.S. corn and soybean yields and ending stocks that are lower than expected both corn and soybean futures will break out above their ceilings at $4.35/bu and $11.35/bu respectively.
The funds continued their selling in live and feeder cattle futures on continued fears that the Trump administration want to lower U.S. beef prices. The fundamentals have not changed, only market psychology has.
Stocks markets continue to worry about a weak U.S. job market, but you can blame ChatGPT for that. In the future, we will have a more efficient, productive and growing economy with a higher unemployment rate until we have more skilled AI workers.
After 34 new record highs in the S & P 500 and 124 new records in the NASDAQ in 2025 we are back to a correction and investor profit taking as AI valuations may have gotten too stretched near-term ahead of NVDA’s 3rd quarter earnings announcement on Nov. 19th. But this is not an AI bubble.
75% of Tesla shareholders approved a $1 trillion pay package for Elon Musk!
It has rained in South America in the last 7 days, but both the American and European models agree that Central Brazil remains dry in the next 14-days!

Farmland taxes in Illinois on the rise

Bayer makes $62bn offer for Monsanto