Lower sales forecast and production forecast on dry weather and drought conditions turned Deere & Co stock lower by 11%. The weakness spread to other agro-equipment companies including Caterpillar, Agco and CnH Global.

Deere & Co. reported third quarter earning of $1.58 same as last year on 2 million lower shares. The quarter generated $387 million in earnings vs. $401 million a year ago on 11% higher revenue. Average earnings estimate from analysts for the quarter was $1.90 per share on revenue of $5.62 billion.

The company reported that the fourth quarter farm equipment sales will decline by 13% and for the year will be up 2% on 25% lower production. As a result the company lowered the earnings guidance for the year to $1.4 billion from the previous target of $1.55 to $1.6 billion.
This translates to earnings per share for the full-year to $5.65 to $5.70 significantly lower than the estimates of $6.42 per share.

Drought conditions in the mid-west and weather uncertainty turned the company to revise the outlook lower.