Equipment manufacturer John Deere saw a slow start to the year in its construction and forestry division, reporting a -7% year-on-year drop in sales for the three months to 31 January to US$ 1.3 billion.
Construction and forestry operating profit for the quarter was US$ 71 million, compared with U$ 124 million for the same period a year before.
John Deere said the drop was due to lower shipment volumes. In addition, it said higher production costs, an unfavourable product mix, as well as increases in research and development and general expenses had impacted the result, although these factors were offset to some extent by higher selling prices.
For the full year, John Deere forecast that its construction and forestry equipment sales would increase +3% – a figure that it said reflected a cautious outlook for US economic growth and higher international sales of construction equipment.