What happened
Shares of Deere & Company (DE 0.94%) fell today after the company reported its second-quarter results. Despite beating Wall Street's expectations for the company's bottom line, investors were disappointed that revenue fell below analysts' consensus estimate.
The industrial stock was down by 12.5% as of 12:32 p.m. ET.
So what
Deere reported diluted earnings of $6.81 per share in the quarter, up from $5.68 in the year-ago quarter, which easily beat analysts' average estimate of $6.65 per share.
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The company's second-quarter net sales increased 9.4% from the year-ago quarter to $12.03 billion, but that fell short of analysts' consensus estimate of about $13.4 billion.
Deere CEO John May said in a press release that the company continues to face "supply chain pressures affecting production levels and delivery schedules," but added, "Deere employees, suppliers, and dealers are working hard to address these challenges."
Investors weren't was optimistic, though. Despite the company beating earnings estimates, investors appeared to latch onto the fact that net sales were below Wall Street's expectations.
Now what
Investor pessimism is already high right now, so it's not all that surprising that Deere's stock is falling today.
Investors are already concerned that sky-high inflation is hurting the economy and they're growing increasingly worried that upcoming Federal Reserve interest rate hikes could tip the economy into a recession.
With Deere missing analysts' sales estimate in the quarter, shareholders are getting jittery that a potential economic slowdown could stifle the company's growth in the coming quarters.
