Deere posts lower quarterly profit, cuts full-year outlook

13/08/2014 - 13:00

(Reuters) - Deere & Co on Wednesday posted a lower quarterly profit and cut its full-year forecast as farmers facing a bumper crop and declining grain prices continued to pull back on purchases of the company's tractors, harvesters and other machinery.

The Moline, Illinois-based company reported a net profit of $850.7 million, or $2.33 a share, for the third quarter ended July 31, compared with $996.5 million, or $2.56 a share, a year earlier.

Sales fell 5 percent to $9.5 billion.

Analysts on average expected Deere to post a profit of $2.22 a share on sales of $8.75 billion, according to Thomson Reuters I/B/E/S.

The stronger-than-expected quarterly profit resulted from sales of the company's construction and forestry equipment, which benefited from a rebound in U.S. nonresidential building.

But Deere said it now expected to earn $3.1 billion in fiscal 2014, down from its previous forecast of $3.3 billion, because of falling farm income in the United States, among other factors.

The company said it expected total U.S. farm cash receipts, which correlate closely with investment in new farm equipment, to fall to $387.1 billion in 2014, down from $407.1 billion in 2013 and below its previous forecast of $392.7 billion.

Shares of Deere were down 0.7 percent at $85.84 in premarket trading.

(Reporting by James B. Kelleher in Chicago; Editing by Jeffrey Benkoe and Lisa Von Ahn)