Deere Reports Decline in Second-Quarter Earnings

Market conditions remain highly uncertain for remainder of the year.

Deere & Co. reported on Wednesday a 38% decline in net income for its second quarter on worldwide sales that decreased 17%. A number of factors hurt results, the company said, including volatile foreign exchange rates, poor agricultural equipment sales outside of the United States, and weakness in the construction and consumer markets.

Net income of $472.3 million, or $1.11 per share, for the quarter ended April 30, 2009, compares with net income of $763.5 million in the same period a year ago. Revenue of $6.748 billion for the quarter was a 17% decrease from one year ago.

Chairman and CEO Robert W. Lane pointed out in the earnings release that Deere remained solidly profitable despite a global economic slowdown. "John Deere has completed a profitable quarter and is successfully executing plans to maintain solid performance in today's difficult economic environment," Lane stated.

Net sales of worldwide equipment declined by 17% in the quarter. In the United States and Canada, the drop was 8% for the quarter, while outside these markets sales dropped by 30%, exacerbated by unfavorable currency translation, the company said.

Deere said it projects equipment sales to drop by 19% for the full year. Net income for that time period is expected to be about $1.1 billion, "with more risk on the downside," the earnings statement said.

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