Deere (DE) With "Eh" Type of Report

I don't see anything special out of Hewlett Packard (HPQ) last night except for the fact that 6400 new people are now going to be unemployed... I'm sorry, that's bearish. 6400 more workers soon will be employed by federal agencies and/or Walmart. And this morning we have an "eh" type of report out of Deere (DE). Since agriculture is my favorite long term thesis (i.e. decades) I always keep an eye out on this company as the big kahuna in equipment. I see very little in the way of green shoots - but hey that's ok, Bank of America (BAC) was able to unload $8B of shares on the public and that's all that matters. Futures as they are 9 out of 10 days the past 2.5 months are of course up. Oil approaching $61 and all is well in the world... as long as you don't live on Main Street.

Let's check in with what Deere (DE) had to say - the agriculture sector has been on fire the past few weeks and after all this company specializes in green shoots...

note: actually there is no reason to read earnings reports anymore; just remember everything bad is to be ignored as backwards looking and every good is to be claimed as "better than expected" and buy stocks - everyone is doing it. The following is just for your amusement... after reading chew on this red pill and forget it.

Via AP

• Deere & Co., the world's largest maker of farm equipment, said Wednesday its fiscal second-quarter profit slid 38 percent as lower crop prices and the global recession dampened demand for its products. It also slashed its 2009 profit outlook by 27 percent.

• The Moline, Ill.-based company said it earned $472.3 million, or $1.11 per share, during the three months ended April 30, down from $763.5 million, or $1.74 per share, a year ago. Revenue fell 17 percent to $6.75 billion from $8.10 billion in the year-earlier quarter.

• Analysts surveyed by Thomson Reuters, on average, had expected profit of $1.07 per share on revenue of $6.60 billion.

• Sales of Deere's tractors, combines and other agricultural equipment -- its biggest source of revenue -- fell 4 percent due to currency exchange fluctuations and lower shipments. Its commercial and consumer division, which makes products like riding mowers, reported a 24 percent decline. Sales of Deere's construction and forestry equipment plummeted 55 percent.

• Deere's finance arm reported a 56 percent decline in quarterly profit.

• The company lowered its projected 2009 net income to $1.1 billion, down from $1.5 billion that it forecast earlier. It cited uncertain market conditions. "The outlook for market conditions over the remainder of the year remains highly uncertain and the impact on the company's sales and earnings is difficult to assess," Deere said in a statement.

• Farmers have become increasingly cautious about spending on new equipment as crop prices -- the main factor driving machinery sales -- have tumbled from historic highs last year. The costs of fertilizer and fuel, meanwhile, remain relatively high. And the global credit crunch has made it more difficult to get loans.

• The company also cut its forecast for full-year earnings yet again, and warned even this lower number was at risk.

• ...the big culprit was a decline in demand for its machines -- a drop that was especially dramatic outside the United States and Canada, where sales fell 30 percent.