Wednesday, August 27th14.1°C
22663
21508

Deere 1Q profit rises, but projects 3 per cent revenue decline this year as farm sales slow

MINNEAPOLIS - Deere & Co. said its first-quarter net income rose almost 5 per cent, but it projected a slowdown in sales of farm equipment this year.

High crop prices in recent years have put money into farmers' pockets and driven a boom in demand for Deere's tractors and other motorized farm gear.

But Deere said Wednesday that demand for farm equipment is "moderating," and it expects sales of its agriculture and turf gear to fall 6 per cent this year as farm incomes decline compared to last year. It's expecting the slowdown to be especially pronounced for sales of larger equipment.

Overall, Deere said sales of farm and construction equipment will fall 3 per cent this year, and will fall 6 per cent in the second quarter. Its profit guidance for the year was unchanged at about $3.3 billion.

It said sales of construction and forestry gear will rise about 10 per cent this year as the economy recovers and more houses are built in the U.S.

"Even in the face of moderating demand for agricultural equipment, Deere is well-positioned to deliver solid performance," Chairman and CEO Samuel R. Allen said in a prepared statement.

Shares of the Moline, Ill.-based company fell 60 cents to $86.86 in morning trading.

For the quarter that ended Jan. 31, Deere earned $681.1 million, or $1.81 per share, up from $649.7 million, or $1.65 per share, a year earlier.

Revenue from equipment sales rose 2 per cent to $6.95 billion as it raised prices, especially on farm gear.

Analysts surveyed by FactSet had been expecting a profit of $1.52 per share on revenue of $6.63 billion.

Jefferies analyst Stephen Volkmann wrote that the projected revenue declines are in line with Deere's guidance.

The first quarter "was a strong quarter, but the beat and unchanged guidance will do little to calm fears of cyclical weakness ahead," he wrote.

Including its financial services arm, Deere revenue rose 3 per cent to $7.65 billion.

The Canadian Press


Read more Business News

21623


Recent Trending




Today's Market
S&P TSX15581.23-37.979
S&P CDNX1015.08-0.28
DJIA17115.238.53
Nasdaq4570.967+0.33
S&P 5002000.16+0.14
CDN Dollar0.9182+0.0053
Gold1281.10+3.7999
Oil94.06+0.20
Lumber348.30-0.90
Natural Gas3.963+0.052

 
Okanagan Companies
Pacific Safety0.175-0.005
Knighthawk0.01-0.005
QHR Technologies Inc1.20+0.01
Cantex0.07+0.005
Anavex Life Sciences0.24-0.01
Metalex Ventures0.07-0.005
Russel Metals36.28-0.34
Copper Mountain Mining3.04+0.01
Colorado Resources0.18+0.005
ReliaBrand Inc0.115+0.02
Sunrise Resources Ltd0.0250.00
Mission Ready Services0.245-0.005

 



22852

FEATURED Property
2009361101- 1028 Lakeshore Drive
1 bedrooms 1 baths
$154,000
more details
image2
Click here to feature your property
Please wait... loading


How much mortgage should you carry?

There are several things to consider when deciding how much home to buy. 1. Draw up a budget including the new mortgage payments. While the rules used by most lenders require that the mortgage paym...


What is a journey without a destination?

Photo: ContributedI would call it a joy ride... You see a planned project or business has a destination. It may be an ongoing revenue stream, it may be a business value or an exit strategy. If you don...


Joint accounts: what you need to know!

Establishing a joint account may seem like a great strategy at first glance. However, there are many factors that must be considered before taking this action. This article will explore the use of &ls...

_








Member of BC Press Council


22097