Deere & Co., the world’s largest agricultural equipment maker, cut its fiscal full-year profit and sales forecasts amid a worsening outlook for farmers as they face declining incomes.
Net income in the 12 months through October will be about $1.3 billion, Deere said Friday in a statement, down from a November projection of about $1.4 billion. The Moline, Illinois-based company now sees equipment sales falling about 10 percent, compared with an earlier prediction they would drop about 7 percent.
Like American farmers, Deere faces a third straight year of falling profit. Farm income is suffering as an oversupply of crops and meat depresses prices for agricultural commodities and farmland. Nebraska’s Creighton University said Thursday that about 37 percent of Midwest and Great Plains bank chiefs who participated in a survey saw their local economy in recession.
Deere Lowers 2016 Outlook
“The need to repair balance sheets and reduce inventories may defer equipment demand into 2017," Bloomberg Intelligence analysts Karen Ubelhart and Anoori Kadakia said in a report on Thursday.
Net income fell to 80 cents a share in the three months through January from $1.12 a year earlier. That compares with the 71-cent average of 19 estimates compiled by Bloomberg.