Deere & Co. posted net income of $850.7 million for its fiscal third quarter, compared to $996.5 million a year ago, a 14.6-percent decline. For the first nine months of the fiscal year, net income declined 7.9 percent from $2.73 billion to $2.513 billion, with the company’s construction and forestry and financial services business faring better than its agricultural equipment segment.
Worldwide net revenues dropped 5 percent to $9.5 billion for the fiscal third quarter and 4 percent to $27.1 billion for the first nine months. Net sales of the equipment operations slipped 6.4 percent for the quarter from $9.316 billion a year ago to $8.723 this year. For the nine month period, equipment operations dove 5.5 percent to $24.9 billion.
“Deere’s third-quarter performance reflected moderating conditions in the global farm sector, which have negatively affected demand for farm machinery and contributed to lower sales and profits for our agricultural equipment business,” said Samuel Allen, chairman and CEO. “At the same time, our construction and forestry and financial services divisions had higher profit, showing the benefit of a broad-based business lineup.”
The company expects sales to decrease about 6 percent for the entire fiscal year, and to drop about 8 percent in the fourth quarter. Still, Allen said, overall it will be a successful year and that the longer-term outlook for its businesses holds promise. “For the balance of the year, the company will be scaling back production in line with demand for our agricultural products,” he noted.
While sales plunged 11 percent for the quarter and 8 percent for nine months in the agricultural and turf division, the construction and forestry business increased sales 19 percent for the quarter and 8 percent for nine months mainly as a result of higher shipment volumes, lower production costs and price realization.
Deere & Co. is based in Moline, Ill.