Deere Raises 2015 Profit Forecast as U.S. Construction Recovers

May 22, 2015 06:43 AM
Deere Raises 2015 Profit Forecast as U.S. Construction Recovers

Deere & Co. forecast better-than-expected profit for fiscal 2015 as demand for its construction equipment mitigated the impact of declining sales of its signature green agricultural machinery.

Net earnings will be $1.9 billion in the year through October, Moline, Illinois-based Deere said Friday in a statement, up from a February projection of about $1.8 billion.

Net income was $2.03 a share for the three months through April 30, more than the $1.56 average of 20 analysts’ estimates compiled by Bloomberg.

Deere’s “construction equipment is largely domestic and should fare well as U.S. markets recover,” Karen Ubelhart, a Bloomberg Intelligence analyst, said in a May 20 report.

That’s a welcome boost for Deere, which is having a tough time with its agricultural-equipment business, the world’s largest and the source of most of the company’s revenue. Spending by farmers is declining on lower crop prices.

Construction makes up 15 percent of Deere’s equipment sales and the U.S. accounts for about 63 percent of its overall revenue. American construction spending in March was up 2 percent from a year ago, according to government data, as house-building and weather conditions improve.

Caterpillar Inc. reported Wednesday a 3 percent gain in North American retail sales of construction machines in the three months through April, bucking a global decline.


Back to news



Spell Check

Abilene, KS
5/22/2015 06:05 PM

  the construction industry won't keep deere afloat long the farm sector is the bread and butter for them and the downturn in the ag industry will drag on much longer than the construction equipment sales will support


Corn College TV Education Series


Get nearly 8 hours of educational video with Farm Journal's top agronomists. Produced in the field and neatly organized by topic, from spring prep to post-harvest. Order now!


Market Data provided by
Brought to you by Beyer