The construction equipment maker's sales rose but missed expectations for the second straight quarter, sending its stock down. Fred Katayama reports.
Strong demand from South America for farm machinery and construction equipment lifted Deere's quarterly sales. But those sales fell short of analysts' estimates for the second straight quarter. That dragged down Deere's shares at the start of trading Friday, cutting into their 48 percent gain over the last 12 months. The stock suffering its biggest intraday loss in two years. Bumper corn and soybean harvests have driven down crop prices, leaving U.S. farmers less cash to spend on Deere's farm equipment. Baird Equity Research's senior analyst Mircea Dobre downgraded Deere's stock and cut its price target, saying, "Stock's had a good run. It's about to get tougher going forward." On the plus side, profit shot up more than 30 percent, beating forecasts. And the company hiked its profit and equipment sales outlook for the full year.