Lower sales continue to hit John Deere

John Deere’s construction & forestry division reported a drop on revenues of -11% year-on-year to US$ 1.47 billion for the three months to 31 July, marking three consecutive quarters of declines.

The company’s third quarter construction & forestry operating income stood at US$ 107 million, compared with US$ 113 million for the same period in fiscal 2012.

For the nine months to 31 July, revenues from the division were down -8% year-on-year to US$ 4.34 billion, while operating income slipped to US$ 259 million, compared with US$ 356 million a year ago.

John Deere said decreased sales and increases in production costs had hit its results, together with higher administrative costs.

For the full year, the manufacturer said it expected sales of construction & forestry equipment to decrease -8% year-on-year, reflecting a cautious outlook for US economic growth.

This contrasts with the forecast issued by John Deere at the end of last year, when it predicted an +8% rise in full-year construction and forestry equipment revenues for 2013 after reporting bumper results for 2012.