Boston, MA 08/14/2014 (wallstreetpr) – Business conglomerate Deere & Company (NYSE:DE) disclosed that it would scale back production of agricultural products in tune with the demand in the remainder period of the current fiscal year. The company also expects equipment sales to be down approximately 8% in the fourth quarter to drag down the overall drop in the fiscal year 2014. During the conference call too, its officials were unwilling to provide a clear-cut picture, but expects a challenging situation in the next fiscal year.
Despite the current challenging conditions, Deere believes that the long-term outlook holds considerable promise for its businesses. The company also believes that it has been acting swiftly and speedily to any changes in the market conditions. It said that it was on track as far as expanding its market presence around the globe was concerned.
CEO Comments
Deere & Company (NYSE:DE)’s chairman and CEO Samuel Allen said that it had witnessed a weak demand for its farm machinery contributing to a fall in sales during the third quarter due to moderating conditions in the farm sector. However, he pointed out that its financial services, construction and forestry segments delivered high profit thus indicating the gains of a wide range of business lineup.
Deere said that its equipment sales dropped 6% for both the third quarter and the nine-month period compared to the year-ago quarter period.
Outlook
Deere & Company (NYSE:DE) expects its equipment sales to record 8% drop in the fourth quarter. However, it expects to close the fiscal year 2014 with equipment sales dropping by 6% over the preceding year. It also projects net income of $3.1 billion for the current fiscal year 2014, which was somewhat weaker than the last year.
On average, Wall Street analysts’ expect Deere to 7.6% drop in earnings per share to $8.40 for the current fiscal year 2014 from $9.09 recorded in the fiscal year 2013. Similarly, analysts’ are predicting the company’s revenue to be weaker by 4.1%.
3Q Results
Deere & Company (NYSE:DE) reported net income of $850.7 million, down from $996.5 million and the earnings slipped to $2.33 a share from $2.56 a share in the year-ago quarter. Its net sales and revenue dipped 5% to $9.5 billion. Both the earnings and revenue came in above the Street analysts’ expectations.
