Deere, reporting FQ3 results tomorrow, faces a lean earnings harvest

|About: Deere & Company (DE)|By:, SA News Editor

Deere (NYSE:DE) shares got no help today from the U.S. government's update on grain crops, which said corn production and yields likely would both break records in 2014; the glut already had pushed the price per bushel to a four-year low last week and will continue to cut into farm incomes despite the higher volumes.

DE cut full-year sales guidance in May, which makes it unlikely the company will miss consensus earnings forecasts of $2.20/share (vs. $2.56 in the year-ago quarter) when it reports FQ3 results tomorrow, but it does not change the downward trend.

In a report call “AGpocalypse Now?,” Morgan Stanley's team worries that DE could be setting up for a repeat of the last agriculture equipment downturn in 1998-99.