Deere & Co.’s improving outlook provides more fodder for an equity market that’s ready to believe in a recovery from the coronavirus pandemic. The company’s plan to cut jobs anyway should give pause.
The agricultural equipment maker said on Friday that it expects to earn about $2.25 billion in 2020, up from a high-end estimate of $2 billion in its May guidance range. Sales declines in its agricultural segment won’t be as steep as previously thought as farmers replace aging equipment and non-professionals stock up as part of the pandemic-fueled boom in spending tied to landscaping, hobbies and home improvement. Even the construction division that’s been hit hard by the macroeconomic downturn and the woes of the oil and gas industry is holding up better than expected. Sales in that business are projected to be down 25% globally this year, compared with an earlier forecast of as much as a 40% slump. Both divisions benefited from price increases in the most recent quarter.