John Deere posts profit drop
The equipment manufacturing firm Deere & Co. posted a 27 percent drop in fiscal third-quarter profit amid continued weak demand and lowered its sales forecast for the full year. The Moline, IL, company said it now expects equipment sales for the current quarter to drop 34 percent, contributing to the “largest expected single-year sales decline in at least 50 years.”
In June, Deere said nearly 800 employees had accepted buyout offers. It also has announced several rounds of layoffs in recent months of a few hundred employees at a time, small numbers for a company with more than 55,000 workers.
For the quarter ended July 31, the company posted earnings of $420 million, or 99 cents a share, down from $575.2 million, or $1.32 a share, a year earlier.
Net sales fell 24 percent to $5.89 billion amid price increases of 6 percent and un favorable effects of foreign exchange of 4 percent.
Net equipment sales outside the U.S. and Canada dropped 37 percent. Deere began to see order cancellations in Latin America and Eastern Europe during the latter part of last year. Overall net sales at the company’s equipment operations fell 25 percent, slightly better than expected, while operating income slid 45 percent amid lower shipment and production volumes. Agricultural and turf equipment, which makes up about three-quarters of the company’s sales, posted a 21 percent fall in sales as profit dropped 34 percent.
Deere affirmed its fiscal year forecast for earnings of $1.1 billion but lowered its forecast for equipment sales, saying it now expects them to fall about 21 percent for the full year. It had previously projected a 19 percent drop. — WLJ