CHICAGO — Deere and Co. presented an underwhelming earnings forecast on Wednesday for fiscal 2019, after missing quarterly profit estimates amid a U.S. trade battle with China that has depressed U.S. farm commodity prices and hurt agriculture equipment demand.
The Moline, Ill.-based tractor maker expects net income of about $3.6 billion in 2019. That would translate into earnings of $11.10 per share, compared with the average analyst estimate of $11.47, according to Refinitiv data.
Equipment sales for the world’s largest tractor manufacturer are estimated to grow 7 percent on the year in 2019 compared with a 29 percent jump in fiscal 2018, which ended Oct. 28.
On Wednesday, the company in a news release reported happier news, announcing net income of $784.8 million for the fourth quarter ended Oct. 28, or $2.42 per share. That’s compared with net income of $510.3 million, or $1.57 per share, for the same quarter in 2017.
For fiscal 2018, net income attributable to Deere was $2.368 billion, or $7.24 per share, compared with $2.159 billion, or $6.68 per share, in 2017.
The company said results for the fourth quarter and the full year of 2018 were affected by adjustments to the provision for income taxes, due to the enactment of federal tax changes in 2017.
Overall, industry sales for farm machines were estimated to have grown 10 percent this year.
The U.S. trade showdown with China, one of the biggest export markets for U.S. agricultural products, is further squeezing American farmers whose incomes have been under a siege for the past four years amid a global grain glut.
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Last year, China imported 32 million tons of soybeans from the United States. But this year, the country has not purchased any of the U.S. crop after Beijing slapped a 25 percent tariff on U.S. imports in July.
The move was in retaliation for U.S. duties on Chinese goods, imposed by U.S. President Donald Trump.