By James B. Kelleher and Nick Zieminski
NEW YORK (Reuters) - Deere & Co
The company, the world's largest maker of agricultural equipment, said it expected a profit of $375 million in the final quarter of its fiscal year, shy of the $385 million analysts had forecast, according to Thomson Reuters I/B/E/S.
Shares of Deere fell 1.5 percent in early trading.
"People imagined the fourth quarter would be better than the guidance," said Sterne Agee analyst Lawrence DeMaria. "Deere did two mega-beats and raises last two quarters."
Deere said strong U.S. and Canadian sales were helping to offset deteriorating conditions in Europe, where it said markets were "down sharply."
The company, 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 Longbow Securities analyst Eli Lustgarten. But he said investors might be disappointed with Deere's fourth-quarter forecast, which "wasn't better than anyone expected."
The company reported a profit of $617 million, or $1.44 a share, for the 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 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.
Shares of Deere were down 1.5 percent at $66.25 in morning New York Stock Exchange trading.
(Reporting by James Kelleher; Editing by Derek Caney and John Wallace)
