(Reuters) — Deere & Co. reported a stronger-than-expected quarterly profit but trimmed its outlook for full-year sales of its farm equipment, citing deteriorating conditions in the former Soviet Union.
Sales of Deere’s tractors and harvesters fell 12 percent during the quarter, more than analysts expected.
The company said aggressive cost cuts and a lower-than-expected tax rate helped offset that weakness.
Deere posted a second-quarter profit of $980.7 million, or $2.65 a share, down from $1.08 billion, or $2.76 a share, a year earlier. Analysts on average had expected $2.48 a share, according to Thomson Reuters. Revenue fell nine percent to $9.95 billion.
It said weaker grain prices would weaken demand with sales of agricultural equipment expected to fall seven percent this year. Also, credit problems associated with the conflict between Russia and Ukraine will like reduce demand from that region.
The company also expected that demand for construction equipment will increase only 4.3 percent, down from a previous forecast of 6.3 percent.
