The farm equipment maker warned that sales will continue to fall in the first quarter and full year but at a slower rate. Fred Katayama reports.
Oh, Deere. The global slowdown in the agriculture sector and construction equipment markets whacked results at the giant farm equipment maker. Quarterly profit fell by nearly half. Equipment sales in the U.S. and worldwide dropped by roughly a quarter. And the strong dollar cut into profit earned abroad. U.S. farmers have been slammed by lower prices for commodities. The resulting reduced income for farmers has hurt demand for farm machinery. Deere relies on farm equipment for more than two-thirds of its revenue. The Agriculture Department just forecast Tuesday farm incomes will suffer their steepest drop in three decades. First Standard Financial's chief market economist Peter Cardillo: SOUNDBITE: PETER CARDILLO, CHIEF MARKET ECONOMIST, FIRST STANDARD FINANCIAL (ENGLISH) SAYING: "Well, I think the agricultural sector next year is probably going to continue to cool, and the reason for that is we're going to see higher interest rates." The company warned that sales will continue to decline in the first quarter and the year but at a slower rate. Its full-year forecast and profit beat Wall Street's expectations, so the stock shot higher in early trading, chipping away at its nearly 14 percent decline this year.