After setting 15 quarterly earnings records in a row, the streak is over for Deere and Company. Wednesday, it reported second quarter profits declined 4% to $981 million. Earnings per share totaled $2.65 compared to $2.76 last year. Worldwide sales dropped nine percent to $9.9 billion from February through April.
Spokesman Ken Golden says he and other Deere officials aren't surprised. They anticipated and prepared for a decline in demand for agricultural equipment this year. That's because farm income is expected to drop compared to last year's record levels.
"Overall, sales are down in agriculture pretty much around the world. So this is impacting our results. But we have put in place a strategy that helps us react quickly, and so we can remain profitable as some of these sales actually come down a bit."
Sales in the agriculture and turf division decreased 12% over the last three months, and Deere predicts they'll fall 7% for the whole year.
Meantime, Golden says sales of construction and forestry equipment rose 2% in the second quarter, and are projected to rise 10% for the full year.
"You know they had some really tough years. So sales have increased in the construction and forestry division, quite nicely. And we believe they'll continue to increase over the next six months."
Deere and Company has not changed its profit projection for this year. It still expects to earn $3.3 billion, down slightly from last year's $3.5 billion.