NEW YORK (AP) — Deere’s fourth-quarter results were stronger than Wall Street expected but it says its farm equipment sales and profits will keep falling in its new fiscal year as the sector remains weak.
Its shares fell 3 percent in premarket trading on Wednesday.
The world’s biggest farm equipment supplier says its annual net income will drop about 40 percent and revenue from agricultural and turf equipment will fall further than it did in fiscal 2014.
Falling commodity prices and lower farm income are hurting companies like Deere & Co., and in August, Deere lowered its outlook and said it would cut production in response to weak sales.
The Moline, Illinois, company said agriculture and turf equipment fell 13 percent in fiscal 2014 and it expects them to drop 20 percent in the current fiscal year. Deere got almost three-quarters of its revenue from those products in the last fiscal year. The company expects revenue from construction and forestry equipment to keep improving.
In the fourth quarter Deere says it earned $649.2 million, or $1.83 per share, down from $806.8 million, or $2.11 per share, a year ago. Its revenue was $8.97 billion, down from $9.45 billion a year ago.
FactSet says analysts expected a profit of $1.57 per share and $7.73 billion in revenue for the quarter, which ended on Oct. 31.
The company’s shares are down $2.68 or 3 percent, to $85.11 in premarket trading about 90 minutes before the market opening. Deere stock has fallen 4 percent in 2014, but it has moved upward since early October, when it traded under $79. The shares reached an annual peak of $94.89 in May.