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Deere & Co. (NYSE: DE) reported fiscal third-quarter 2018 results before markets opened Friday morning. The farm and heavy equipment maker posted diluted earnings per share (EPS) of $2.78 on revenues of $9.29 billion. In the same period a year ago, the company reported $1.97 in EPS on revenues of $6.83 billion. Third-quarter results also compare to consensus estimates for EPS of $2.75 and revenues of $9.21 billion.

Adjusted to exclude favorable changes in U.S. tax law, third-quarter EPS would have been $2.59 on net income of $849 million. For the first nine months of Deere’s fiscal year, the company’s net unfavorable provisional tax expense comes to $741 million.

Year over year, quarterly net sales in the worldwide equipment operations group rose 36%. Operating profit rose from $804 million in the year-ago quarter to $1.09 billion. Excluding the effect of Deere’s acquisition of Wirtgen, operating income for the quarter would have been $1 billion, primarily driven by higher shipment volumes, lower warranty costs and price realization, partially offset by higher production costs and research and development expenses.

For the 2018 fiscal year, Deere estimates net sales to rise by about 26% from last year’s total of $25.89 billion. That pencils out to $32.62 billion, below the current consensus estimate of $33.78 billion.

Deere has maintained its $3.1-billion estimate of adjusted full-year net income. The prior estimate included $803 million in provisional tax expense; the new estimate includes an estimated tax expense of $741 million.

Deere maintained its estimate of equipment sales growth of “about 30%” and about 21% for the fourth quarter. About 12% of both estimates is attributed to Wirtgen. Currency effects are forecast to have no material impact on full-year sales but are expected to have an unfavorable 3% effect on fourth-quarter totals. The company did not offer an EPS estimate, but analysts are looking for $9.53, slightly more than their estimate of $9.46 at the end of the previous quarter.

CEO Samuel R. Allen said:

Deere’s third-quarter performance benefited from favorable market conditions and positive response to our advanced product lineup. Farm machinery sales in North America and Europe made solid gains, while construction equipment sales moved sharply higher and received significant support from our Wirtgen road-building unit. At the same time, we have continued to face cost pressures for raw materials and freight, which are being addressed through a combination of cost management and pricing actions.

No matter how you look at it, Deere lowered its revenue and profit outlook for the 2018 fiscal year. Beating estimates for the current quarter is not enough these days.

Shares of Deere traded down about 4.6% at $131.06 in Friday’s premarket. The stock’s 52-week range is $112.87 to $175.26, and the consensus 12-month price target was $180.76 before the report.

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