John Deere downgrades 2013 forecast

John Deere has revised its full-year forecast for construction and forestry equipment sales downwards after its weak start to 2013 continued, impacted by lower sales and higher production costs.

Construction and forestry revenues were down -6% year-on-year in the fiscal second quarter to US$ 1.6 billion, after falling -7% in the first three months of the financial year to 31 January, 2013.

As a result, for the six-months to the end of April revenues stood at US$ 2.9 million, also down -6% compared to the same period last year. First half operating income dropped to US$ 153 million, compared to US$ 243 million for the six months to 30 April, 2012.

John Deere said an, “Unfavourable product mix,” together with higher research and development expenses had also taken their toll on results.

Looking ahead, the manufacturer forecast that worldwide sales of construction and forestry equipment would drop -5% for 2013 – a reversal of the +3% growth it had forecast after issuing its first quarter results.

“The decline reflects a cautious outlook for US economic growth, cool, wet weather conditions in North America, and flat sales in world forestry markets,” the company said.