Deere Q2 Profit Tops Estimates

reported stronger-than-expected earnings for the fiscal second quarter and lifted its full-year earnings forecast. The Moline, Illinois-based company posted a quarterly profit of $690.5 million, or $2.03 per share, versus a year-ago profit of $980.7 million, or $2.65 per share. Its total revenue declined 18 percent to $8.17 billion, while sales of the equipment operations slipped to $7.399 billion from $9.246 billion. However, analysts were expecting a profit of $1.55 per share on revenue of $7.53 billion. The average estimate among 23 Estimize users was for earnings of $1.66 per share and revenue of $7.77 billion. Agricultural and turf sales dropped 25 percent in the quarter, while construction and forestry sales rose 2 percent. "John Deere's second-quarter results were noteworthy in light of the weak conditions that continue to affect the global agricultural sector," said Samuel R. Allen, chairman and chief executive officer. "Our performance reflected the adept execution of our operating plans and contributions of a well-rounded business lineup. Deere's construction and forestry and financial-services divisions had higher results for the quarter, and our agriculture and turf operations remained solidly profitable despite lower demand for large models of farm machinery." For FY15, Deere projects equipment sales to fall 19 percent year-over-year and agriculture and turf sales to drop 24 percent. The company had earlier expected a 17 percent decline in equipment sales and a 23 percent drop in agriculture and turf sales. It expects sales of construction and forestry equipment to rise 2 percent. The company projects FY15 net income of $1.9 billion, versus its February forecast of around $1.8 billion. Deere shares rose 1.72 percent to $91.00 in pre-market trading.