By Meredith Davis
(Reuters) - Deere & Co
Lower commodity prices and falling farm incomes continued to pressure demand for agricultural machinery, with the declines most pronounced in higher-horsepower models, the company said on Friday. It also cited lower demand for construction equipment.
Farm and turf equipment sales, which account for more than two-thirds of total revenue, fell 24 percent to $5.31 billion in the third quarter ended July 31.
Sales in the construction and forestry segment decreased by 13 percent to $1.53 billion.
Net income slid to $511.6 million, or $1.53 per share, from $850.7 million, or $2.33 per share, a year earlier.
Total revenue declined 20 percent to $7.59 billion.
The company revised lower its outlook for fiscal 2015 net income to $1.8 billion from $1.9 billion.
Its fourth-quarter equipment sales projection was revised down to 24 percent lower, from 17 percent lower.
The company said equipment sales are projected to decrease about 21 percent for fiscal 2015, revised down from 19 percent forecast in the previous quarter.
Overall U.S. and Canadian sales were forecast to be down about 25 percent for 2015, Deere said.
The company lowered full-year fiscal 2015 international sales projections. Lower crop prices and farm income, combined with pressure in the dairy sector were expected to drag sales lower by 10 percent in the European Union.
In South America, sales of tractors and combines were projected to fall by 20 percent to 25 percent due to economic uncertainty and higher interest rates on government-sponsored financing in Brazil.
In the latest quarter, international sales were softer due to a stronger U.S. dollar. Outside the United States and Canada, net sales fell 23 percent in the quarter, with 12 percent of the decline attributable to the effects of a stronger dollar.
Deere shares were off 8.1 percent to $83.32.
(This version of the story corrects the percent figure in the headline)