John Deere releases earnings
Farm equipment manufacturer John Deere releases its quarterly report before the market opens on Friday. The news is not expected to be good, because many farmers are struggling with low grain prices, such as those for corn and soybean prices which have dropped by 45 percent or more.
“Profitability for farmers is the worst that it’s been in definitely well over five or six years,” says Kwame Webb, an analyst at Morningstar, “Sales for Deere and most of its competitors in the agricultural market [are] down in the order of 20 to 30 percent.”
It could take two years before farmers start to recover enough for sales to pick up again, according to Webb and Lawrence De Maria, a global industrial infrastructure analyst at William Blair & Co.
“[John Deere has] taken production down quite a bit,” De Maria says, “They’ve had a lot of factory people being laid off around the enterprise to reduce costs.”
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