DEERE SALES FALL, STOCK RISES
Poor outlook for ag machinery offset by construction and forestry
John Deere's Q2 results present a pessimistic view for the immediate future of the farm machinery market, a downturn in sales in the sector offset by growing sales of construction equipment.
However, internal reorganisation has resulted in Deere raising its nett income forecast for 2015 from $1.8 billion to $1.9 billion. Shares jumped by as much as 4.6% upon the release of the Q2 figures.
Deere expects overall equipment sales to drop 17% in Q3 and 19% in the 2015 financial year on weak demand for agricultural machines and strong dollar. By segment, the company expects global construction and forestry equipment sales to grow about 2% in fiscal 2015 but global sales of agriculture and turf equipment to drop 24%.
"John Deere expects to be solidly profitable in 2015, with the year ranking among our stronger ones in sales and earnings despite the pullback in the farm sector," said Chairman and CEO Samuel Allen in a printed statement.
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