MOLINE, Ill. – Deere cut its full-year earnings forecast Friday even as the agricultural equipment maker beat Wall Street’s expectations for the first quarter. It has been dealing with weak sales of farm and construction equipment.
Its shares fell more than 3 per cent in afternoon trading.
Falling commodity prices have made farmers less likely to buy new equipment. Declining oil prices have also affected its construction equipment sales.
In November the company announced that it was laying off about 220 workers.
But Deere has been effectively managing its costs. In the first quarter, total costs and expenses declined to $5.17 billion from $5.82 billion.
For the period ended Jan. 31, Deere & Co. earned $254.4 million, or 80 cents per share. That is down 34 per cent from its earnings of $386.8 million, or $1.12 per share, a year earlier.
This beat the 71 cents per share that analysts surveyed by Zacks Investment Research expected.
Revenue for the Moline, Illinois-based company totalled $5.53 billion. Sales for the agriculture and turf unit dropped 12 per cent in the quarter. Construction and forestry division sales fell 23 per cent.
For fiscal 2016, Deere now anticipates equipment sales declining about 10 per cent and earnings of approximately $1.3 billion. Its prior guidance was for equipment sales to fall 7 per cent and earnings to come in at about $1.4 billion.
The company predicts equipment sales will drop approximately 8 per cent in the second quarter.
Deere shares fell $2.86, or 3.6 per cent, to $77.47 in afternoon trading Friday. Its shares are down almost 15 per cent over the past year.
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Elements of this story were generated by Automated Insights (http://automatedinsights.com/ap) using data from Zacks Investment Research. Access a Zacks stock report on DE at http://www.zacks.com/ap/DE
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Keywords: Deere, Earnings Report
