Deere & Co reported quarterly earnings that were weaker than had been expected Friday as increasing costs bite into the tractor and farm equipment maker’s bottom line.
Adjusted earnings per share for Deere ended the month at $2.59 for the company’s fiscal third quarter. Analysts were expecting the company to post $2.75 per share in earnings for the three-month period.
CEO Deere Samuel Allen said the business continued facing cost pressure during the quarter for raw material as well as freight, which the company is addressing through both cost management and actions with its pricing. The cost of production as it related to a percentage of the company’s net sales increased from 75.2% to 77% during the second quarter.
The increase in costs comes as the White House administration has entered a trade dispute with important economic partners. The U.S. has already placed tariffs on imports worth billions of dollars from China, Mexico and Europe.
China, Mexico and the European Union have all placed their own tariffs on products from the U.S. in retaliation for what the U.S. did.
Shares of Deere fell by up to 3.7% prior to recovering to end Friday trading 2.4% higher.
However, Deere posted revenue that was better than had been expected for its fiscal third quarter. Sales ended the quarter at $9.28 billion while analysts were expecting sales to end at $9.21 billion. The revenue at the company was given a boost from its strong sales in both its agriculture and turf segment which ended the quarter with sales of $6.29 billion.
The net income for the company also increased by 42% as compared to the same period one year ago from $642 million to $910 million. Part of that increase was due to the lower corporate taxes in the U.S.