Deere’s profit tops budget
MOLINE, Ill. (AP) – Even though sales of its green tractors, bulldozers and other equipment fell sharply, Deere & Co. reported better-than-expected fourth-quarter earnings as it cut costs.
The Moline, Illinois-based company also posted an earnings outlook for the year that surpassed Wall Street expectations. Its shares rose more than 4 percent in afternoon trading Wednesday.
Deere has been hurt by weak commodity prices which have made farmers less likely to buy new equipment. And falling oil prices has hurt sales of its construction equipment.
Sales of its agriculture equipment, which include tractors, fell 25 percent in the quarter from a year ago. Sales of its construction equipment fell 32 percent in the period from a year ago.
For the fiscal year 2016, the company expects earnings of about $1.4 billion, above the $1.33 billion analysts expected, according to FactSet. Deere said it expects sales of its equipment to fall 7 percent in fiscal 2016, compared with the year before.
The results surpassed Wall Street expectations. The average estimate of 10 analysts surveyed by Zacks Investment Research was for earnings of 74 cents per share.
Deere said it cut costs by 21 percent to $6.26 billion.
The agricultural equipment manufacturer posted revenue of $5.93 billion in the period, which fell short of Street forecasts. Five analysts surveyed by Zacks expected $6.13 billion.
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