John Deere’s financial results for the first quarter of the year has revealed that the company’s construction and forestry division saw sales decline 10% to US$2.04 billion compared to 2019’s first quarter sales of US$2.26 billion.
The construction and forestry division also saw operating profit decline 59% from US$229 million in the first quarter of 2019 to US$93 million.
John C. May, chief executive office of John Deere said, “Activity in the construction sector has slowed leading to lower sales and profit for our Construction & Forestry division. Also impacting results in Deere’s construction equipment business were our actions to reduce factory production and lower inventories in response to current market conditions.
“Additionally, the quarter included costs of a voluntary employee-separation program, which is among the steps Deere is taking to improve flexibility and efficiency.”
Overall net sales and revenues for the company - which owns Wirtgen Group - were down 4% in the first quarter of 2020 compared to 2019 at US$7.63 billion.
John Deere predicts that North American construction and forestry equipment sales will decline by 5-10% this year, with global sales down 10-15%.