Deere Announces Q3 Results, Layoffs
While Deere's construction, forestry and financial services are showing growth, the slowdown in agriculture contributed to a 5% decrease in the company's third quarter revenue. Because of "current market conditions" the company announced layoffs at four ag equipment factories.
For the quarter, net income was about $851 million compared to $996 million last year. Worldwide net sales and revenues decreased 5 %, to $9.500 billion, for the third quarter; down 4 %, to $27.102 billion, for nine months.
"Deere's third-quarter performance reflected moderating conditions in the global farm sector, which have negatively affected demand for farm machinery and contributed to lower sales and profits for our agricultural-equipment business," said Samuel R. Allen, chairman and chief executive officer. "At the same time, our construction and forestry and financial services divisions had higher profit, showing the benefit of a broad-based business lineup. Overall, it was a quarter of solid performance, with income exceeded only by last year's record for the corresponding period."
The company's outlook now is for equipment sales to decrease about 6% for fiscal 2014, with the foiurth quarter expected to be off 8%.
Sales fell 11% for ag and turf sales for the quarter while construction and forestry increased 19% for the quarter, up 8% for the first 9 months. The company is forecasting a 10% increase in sales for the year for its construction and forestry equipment for full-year 2014. The gain reflects further economic recovery and higher housing starts in the U.S.
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