John Deere’s profits not helped by construction

John Deere reported third quarter sales of US$ 4.6 billion, down -20.8% on the US$ 5.8 billion recorded for the same quarter last year. Pre-tax profits for the quarter slipped -41% from US$ 934 million in 2008 to US$ 552 million this year.

The construction and forestry division saw sales of US$ 632 million, down -47% on the US$ 1.1 billion reported 12 months ago.

Following an operating profit of US$ 93 million for the quarter in 2008, the division recorded a -US$ 28 million loss this year. This was attributable to lower shipment and production volumes as well as higher raw material costs according to a company statement.

Samuel R. Allen, president and CEO said, "Deere's construction and forestry business is successfully adjusting expenses and stock levels in response to the severe decline in its markets."

In spite of the current economic conditions, John Deere believes underlying trends remain promising for its business. "John Deere is well positioned to respond to the world's growing need for food, shelter, infrastructure and energy," said Mr Allen. "We're confident our ability to adjust production in response to dynamic markets will help us come through today's challenging times in a strong condition."