MOLINE, Ill. (AP) — Deere reported a 9.5 percent decline in second-quarter net income Wednesday on lower demand for farming equipment and cut its sales forecast for the year.
The company beat Wall Street's quarterly expectations on both profit and revenue, but the sales outlook weighed on the company's stock price.
With farmer income projected to decline, Deere said sales of its agriculture and turf equipment could fall 7 percent for the full year. It had projected a 6 percent decrease in February.
The U.S. economic rebound and housing recovery is helping to offset some of the decline in agriculture. The company expects its construction and forestry equipment sales to rise 10 percent this year.
Overall, the company expects a 4 percent drop in equipment revenue for fiscal 2014. It projected a 3 percent fall three months ago. For the current quarter, it's also expecting a 4 percent decline in equipment revenue.
Net income in the most recent quarter fell to $980.7 million, or $2.65 per share, compared with $1.08 billion, or $2.76 per share, in the same quarter a year ago.
That was much better than the per-share forecast of $2.47 on Wall Street, according to a poll of analysts by FactSet.
Revenue fell 8.9 percent to $9.95 billion, from $10.91 billion, but that also edged out analyst expectations for $9.63 billion.
For the full year, Deere maintained its forecast for net income of $3.3 billion.
Shares of Deere & Co., based in Moline, Illinois, fell $1.91, or 2 percent, to close at $91.70 Wednesday.