Deere & Co. posted a 27% drop in its fiscal third-quarter profit and cut its full-year sales forecast, though North American business remains resilient ahead of what is expected to be a near-record crop harvest.
The farm- and construction-equipment maker expects to break-even in the fourth quarter but reaffirmed its forecast for full-year profit of $1.1 billion as cost-cutting counters weaker pricing and negative currency effects.
Deere, like rivals CNH Global NV and Agco Corp., has seen farm-equipment sales fall in Europe and Latin America over the past year as high fuel and fertilizer costs combined with tight credit conditions , Wall Street Journal reports.
Deere, which also makes construction and forestry equipment, has faced dwindling demand as farmers and other customers rein in spending in response to poor economic conditions and weaker crop prices. Tight credit markets in some countries have made it difficult for potential buyers to finance purchases of the company’s products , New York Times reports.
"Given that the [full-year] earnings guidance hasn't changed, the profit that people expected in the fourth quarter was just pulled into the third quarter," said
Deere, the world's largest manufacturer of farm tractors by sales, is widely watched as a barometer for the global farm commodities , CNNMoney.com reports.