MOLINE, Ill. (AP) — Deere's profit slumped 15 percent in the third quarter and the farming equipment maker, seeing weak sales ahead, trimmed its outlook and will cut production.
Chairman and CEO Samuel Allen said Wednesday that the cuts will bring production "in line with demand for our agricultural products."
With commodity prices falling, the U.S. Department of Agriculture in February predicted that farm income in 2014 would sink to levels not seen in four years.
That is cutting into the spending power of farmers and hitting companies like Deere, the world's biggest farm equipment supplier.
Deere is now forecasting equipment sales will fall about 6 percent for fiscal 2014. Its prior guidance was for a 4 percent decline. For the fourth quarter, the company estimates equipment sales will drop approximately 8 percent.
In the U.S. and Canada, agriculture and turf sales are expected to fall approximately 10 percent in fiscal 2014. Sales of tractors and combines in South America are expected to fall about 15 percent, compared with a prior outlook for an approximately 10 percent decline.
Deere now anticipates sales of worldwide agriculture and turf equipment will drop about 10 percent in 2014, lower than a prior forecast for an approximately 7 percent decline. In the third quarter, agriculture and turf sales fell 11 percent.
For the three months ended July 31, Deere earned $850.7 million, or $2.33 per share. That topped expectations of $2.20 per share, according to a poll by FactSet. But that's still down significantly from last year, when the Moline company earned $996.5 million, or $2.56 per share.
Continue reading this story on the...