By James B. Kelleher
NEW YORK (Reuters) - Deere & Co
Strength in U.S. and Canadian sales helped offset deteriorating conditions in Europe, where the company said markets were "down sharply."
Deere, which also makes construction and forestry equipment, said demand for those products from builders was rebounding from the lows hit after the popping of the worldwide property bubble. But it said sales were still "far below normal levels."
"Profitability is great in ag and improving in construction," said Eli Lustgarten, an analyst at Longbow Securities. But he said investors might be disappointed with Deere's fourth-quarter forecast, which "wasn't better than anyone expected."
Deere shares were down 2.4 percent in premarket trading.
The world's largest maker of farm equipment reported a profit of $617 million, or $1.44 a share, for the fiscal third quarter ended July 31, up from $420 million, or 99 cents a share, a year earlier.
Sales rose 16 percent to $6.84 billion, lifted by a 19 percent increase in sales to customers in the United States and Canada.
Analysts, on average, had expected the Moline, Illinois-based company to report a profit of $1.24 a share before one-time items, on sales of $6.52 billion, according to Thomson Reuters I/B/E/S.
Deere said it expects industrywide sales of agricultural equipment in the United States and Canada to rise 5 percent to 10 percent this year, lifted by solid commodity prices and low interest rates, which are boosting farm incomes.
But it said it now expects industrywide sales in Western Europe to fall 15 percent to 20 percent because of weakness in the livestock and dairy sectors. Big inventories of used equipment, especially combines used to harvest crops, are also hurting sales in the region, it said.
(Reporting by James Kelleher; Editing by Derek Caney and John Wallace)
