Deere makes quarterly gains; forecasts weaker 2011 ; Europe demand continues to lag
Created 11/24/2010, 05:26:07 pm
The world’s largest maker of farm equipment offered a cautious preliminary forecast for 2011 that fell short of Wall St.’s forecasts, however, sending its shares lower in early market trading.
It warned the coming year would be complicated, with a record number of new model introductions as a result of new, more stringent emissions standards in many markets.
Deere expects a full-year 2011 profit of $2.1 billion. Analysts on average expected $2.42 billion, according to Thomson Reuters I/B/E/S.
The forecast “reflects the complexity of transitioning to these new equipment models as well as increased product costs to comply with the regulations,” the company said in a statement.
Deere also expects higher raw-material costs in 2011 and a less favourable sales mix in its flagship farm division.
The company reported a fiscal fourth-quarter profit of $457.2 million, or $1.07 a share, compared with a net loss of $222.8 million, or 53 cents a share, a year earlier.
Sales rose 35 per cent to $7.2 billion.
Analysts on average expected the Moline, Ill.-based company to report a profit of 95 cents a share on sales of $6.25 billion, according to Thomson Reuters I/B/E/S.
The company, which also makes equipment used by builders and foresters, said those sales, which tumbled after the financial crisis, rebounded 75 per cent from record lows.
The company’s agricultural equipment line contributed most to the quarterly results. Deere said sales to the U.S. farm sector included “a highly favourable sales mix of larger equipment.”
Source: calgaryherald.com
