Deere profit falls 40 percent on weak demand for farm equipment

[August 21, 2015] (Reuters) - Deere & Co on Friday reported that third-quarter profit tumbled 40 percent on weak demand for agricultural equipment, overall lower shipment volumes and a stronger dollar, and gave a bleaker forecast for fourth-quarter sales.

Deere shares were off 4 percent to $86.95 in premarket trading.

"John Deere’s third-quarter results reflected the continuing impact of the downturn in the farm economy as well as lower demand for construction equipment," Samuel R. Allen, chairman and chief executive officer, said.

Farm and turf equipment sales, which account for more than two-thirds of total revenue, fell 24 percent to $5.31 billion.

Sales in the construction and forestry segment decreased by 13 percent to $1.53 billion.

Net income slid to $511.6 million, or $1.53 per share, in the third quarter ended July 31, from $850.7 million, or $2.33 per share, a year earlier.

Total revenue declined 20 percent to $7.59 billion.

The company said equipment sales are projected to decrease about 21 percent for fiscal 2015, revised down from 19 percent forecast in the previous quarter.

Its fourth-quarter equipment sales projection was also revised down to 24 percent lower, from 17 percent lower.

(Reporting by Meredith Davis; Editing by Jeffrey Benkoe)

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