The biggest agricultural-equipment manufacturer in the world – Deere & Co. made a statement, revealing that its equipment sales over the second quarter of the fiscal year that trailed analysts estimates. The company also narrowed its forecast for its full-year revenue due to weak dollar against other currencies and a drop in machinery sales.
Mr. Samuel Allen, the current Chairman and Chief Executive Officer of Deere & Co. said in the statement, which was cited by the Wall Street Journal: “Were confident our extensive investments in new products and markets, coupled with a tight rein on costs and assets, will keep the company on a sound financial footing and help sustain our growth plans.”
According to Deere & Co.s statement, the second-quarter profit of the company declined by 9.5% due to decreasing equipment sales. The sales of the company for the second three months of the fiscal 2014 fell from 10.3 billion dollars for the same period a year ago to 9.25 billion dollars, trailing analysts expectations of 9.65 billion dollars.
In 2013 the sales of agricultural machinery generated 78% of the companys revenue, while construction and forestry generated 16%.
According to the companys statement, Deere & Co. projects a 4% decline of its global agricultural-equipment sales for the full fiscal year. The company also forecasts a 4% drop of its annual sales in comparison to its previous 3%-drop projection. Deere & Co. also explained that it expects its sales of the construction and forestry divisions to increase by 10% on an annual basis due to an improvement of the U.S. housing sector. The company kept its projection for 3.3-billion-dollar full-year net income.
As reported by Bloomberg, one of the analysts working for Jefferies Group LLC – Mr. Stephen Volkmann said in a telephone interview before the company disclosed its earnings: “armers might be little bit cautious in buying equipment because they have a little less earnings, and a little less tax benefits.”
Deere & Co. was 1.99% down to trade at 91.75 dollars per share on the NYSE, marking a one-year change of -2.15%. According to the information published on CNN Money, the 20 analysts offering 12-month price forecasts for Deere & Co. have a median target of 88.00, with a high estimate of 110.00 and a low estimate of 75.00. The median estimate represents a -5.99% decrease from the last price of 93.61.
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