There was cautious optimism in the manufacturing sector about a month ago when Deere & Company beat analyst predictions on its first-quarter financials.
Now, Deere has removed its 2020 financial guidance, or what it was forecasting for revenue and expenses this year, amid the growing COVID-19, or new coronavirus, outbreak.
Deere disclosed the move in a federal Securities and Exchange Commission filing Monday morning.
“The ultimate magnitude of COVID-19, including the extent of its impact on Deere & Company’s financial and operational results, which could be material, will be determined by the length of time that the pandemic continues, its effect on the demand for the company’s products and services and the supply chain, as well as the effect of government regulations imposed in response to the pandemic,” Deere officials wrote in the filing.
Domestic operations continue after federal U.S. officials last week deemed Deere an essential critical infrastructure business, and Deere has implemented other actions, such as social distancing in the workplace and travel restrictions for employees. The Moline-based manufacturer also continues its operation in overseas markets “to the extent possible.”
“These operations, however, may be affected by issues such as remote working arrangements, adherence to social distancing guidelines, and other COVID-19-related challenges,” Deere wrote Monday morning.
“Presently, certain of the company’s facilities are reducing operations and, in some cases, are temporarily shutting down operations due to the effect of the coronavirus.”
Any reductions or temporary shutdowns are currently happening outside of the United States and impacting the supply chain in Asia, Europe and South America, according to a statement from Deere.
Deere temporarily closed its facilities in China for a time earlier this year amid the spread of COVID-19 at that time. Deere officials have worked with Chinese municipal officials to bring those facilities back online.
Due to these circumstances and the evolving situation, such as the supply chain, logistics and demand for Deere products, Deere withdrew its financial outlook for 2020. Deere will likely update that outlook during its second-quarter earnings announcement and conference call slated for May 22.
The site also says Deere will waive copays, coinsurance, and deductibles for COVID-19 testing for employees.
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