Deere & Co’s shares hit an all-time high Friday after the corporate posted an unexpected lift in first-quarter profit; however, the world’s biggest farm equipment manufacturer warned the epidemic of coronavirus would hit sales and earnings in Q2.
Shares soared 9.7% to their highest-ever point of $181.99 in morning trade after Deere stated it notices indicators of stabilization in the U.S. farm market, which has been struck by an almost two-year-long commerce war with China.
Shares had been up 8% at $179.16 in mid-afternoon.
A lower tax rate upped the quarterly revenue to $1.63 a share from $1.54 per share in 2019, topping Refinitiv’s average analyst prediction of $1.26 a share.
The trade warfare hit American agricultural exports to China, a major purchaser of soybeans, leaving farmers struggling to turn a profit and damaging purchases of new farm equipment.
The Moline, Illinois-based firm stated an early order program for its combines ended this year with low single-digit growth in the U.S. It described the tractor order book for this year as “healthy.”
The corporation, nevertheless, notified the epidemic of coronavirus will impact its next sales and earnings report.
The epidemic forced Deere to shut all eight of its centers in China and is also frightening to affect its factories in the U.S. by limiting supplies of a number of parts that previously came from China.
Deere stated limited output has restarted at a few of its Chinese plants. It projects spending $40 million in Q2 on expedited freight and is working with suppliers and logistics providers to ease the supply issues.