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Deere and Co, the owners of the John Deere tractor brand, has reviewed its earnings forecast for the financial year to October, saying it will finish at about US$1.9 billion despite sales having fallen by 19% in the year so far, not 17% as previously forecast.
Earnings Feb-April dropped 30% to US$690.6 million, on revenues down 20% to US$ 7.40b, much less than forecast.
Samuel Allen, chairman and chief executive, said “JD expects to be solidly profitable in 2015 despite a pullback in the farm machinery sector. All in all we remain confident in the company’s direction and our ability to meet our customers’ needs.”
First quarter results were noteworthy in light of the weakness blighting the global agricultural sector.
Deere agricultural sales fell 25% to US$ 5.77b; the construction division gained 2% to finish at US$ 1.63 billion.
Lower commodity prices and falling farm incomes put pressure on demand for agricultural machinery, particularly larger items such as combine harvesters and large tractors traditionally bought by Canadian and North American grain farmers.
Deere predicts the market in Brazil will fall by 15-20% due to economic uncertainty and the high-interest government loans normally used to fund agriculture.
The Canadian and US markets look likely to fall by only 25% as the the livestock sector show signs of rallying on the back of low grain prices.
Twelve months after its release, the all-new John Deere S7 combine harvester has been put through its paces across a range of grain-growing regions, so producers can see first-hand its potential productivity and efficiency benefits.
Designed to allow customers to adopt technology and reduce costs, John Deere’s Precision Essentials Programme, offers those customers the option to either buy all their precision agriculture (PA) technology upfront, or select only the hardware and software that will be most valuable to their business.
John Deere has started the New Year with the release of JDLink Boost, using a satellite connectivity solution to ensure customers continue seamless work in fields with little to no cellular coverage.
The recently announced Milk Sustainability Centre – a collaboration between global giant John Deere and milking and feed specialists De Laval – is said to deliver dairy farmers a new tool to enhance efficiency and sustainability, while also rising to the challenges of changing regulations that affect their businesses.
Agri-tech company Precision Farming is linking with John Deere’s Operations Centre guidance technology to automate nutrient and spray record-keeping and Nitrogen Cap compliance for farmers.
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