Deere Lifts Profit Outlook as Sales Fall Less Than Expected
2016年8月19日 - 9:20PM
Dow Jones News
Deere & Co. said profit and sales fell again in its third
quarter as global markets for farm and construction equipment
remain weak.
Still, the company boosted its full-year earnings forecast after
posting a surprise increase in per-share profit, and the sales
decline wasn't as bad as Wall Street expected. Shares rose 2.2% in
light premarket trading.
Deere was helped by higher prices and lower production costs
during the quarter. Overall costs and expenses fell 12% in the
period, and the company's gross margin expanded to 23.3% from
21.7%.
Deere, the world's largest seller of farm tractors and
harvesting combines, has been struggling through a prolonged slump
in U.S. farm machinery demand, crimped by lower prices for corn,
soybeans and other commodities that has lowered farmers incomes and
forced them to pull back on equipment spending. Also, the strong
U.S. dollar has made its machinery more expensive abroad, and
cutbacks in investment spending by energy-related companies have
dented the company's results.
Sales of agricultural and turf equipment slipped 11% to $4.7
billion in the quarter. Its much smaller construction and forestry
segment posted a 24% sales decline, to $1.16 billion.
In all, Deere reported a profit of $488.8 million, down from
$511.6 million a year earlier. On a per-share basis, earnings were
$1.55, up from $1.53 because of a lower number of shares
outstanding. Analysts expected 94 cents in per-share profit,
according to Thomson Reuters. Revenue fell 11% to $6.72 billion.
Analysts expected $6.09 billion.
The company now expects to earn $1.35 billion this year, up from
its May forecast of $1.2 billion.
Write to Joshua Jamerson at joshua.jamerson@wsj.com
(END) Dow Jones Newswires
August 19, 2016 08:05 ET (12:05 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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