Deere Gives Upbeat Outlook as Earnings Fall
By Imani Moise
Farm-equipment supplier Deere & Co. said its earnings and sales fell in the most recent quarter as the company continued to cope with soft demand.
Lower prices for farm commodities and a glut of used equipment have made farmers cautious of buying new equipment, but the company said the market is turning around.
"We are seeing signs that after several years of steep declines key agricultural markets may be stabilizing," said Chief Executive Samuel Allen.
Although the Moline, Ill.-based company still expects agriculture and construction sales to be down industry wide, Deere projected 3% revenue growth for its agriculture & turf segment and 7% growth in its construction and forestry business for the fiscal year.
Both segments were hurt by lower volumes during the quarter. Agriculture and turf sales were flat and construction and forestry sales dropped 6%.
In all for the first quarter, Deere reported a profit of $193.8 million, or 61 cents a share, down from $254.4 million, or 80 cents, a year earlier. The most recent quarter included a $94 million pretax charge related to employee separation programs.
Net sales fell 1.5% to $4.69 billion. Revenue including financial services and other items rose 1.8% to $5.63 billion
Analysts polled by Thomson Reuters had forecast earnings of 55 cents on $4.68 billion in revenue.
Shares rose 2.7% to $112.15 premarket and have risen 19% over the past three months through Thursday's close.
Write to Imani Moise at firstname.lastname@example.org
(END) Dow Jones Newswires
February 17, 2017 08:10 ET (13:10 GMT)Copyright (c) 2017 Dow Jones & Company, Inc.