For the first financial quarter ended January 31, worldwide net sales of John Deere registered a decline of 13 percent, to $5.525 billion, compared with $6.383 billion last year. Net sales of the equipment operations were $4.769 billion for the quarter compared with $5.605 billion a year ago.
"John Deere's first-quarter results reflected the continuing impact of the downturn in the global farm economy as well as weakness in construction equipment markets," said Samuel R. Allen, chairman and chief executive officer.
John Deere's construction and forestry sales decreased 23 percent for the quarter, mainly as a result of lower shipment volumes and the unfavorable effects of currency translation, partially offset by price realization. Operating profit was $70 million for the quarter compared with $146 million in 2015. The decline in operating profit was mainly due to lower shipment volumes, partially offset by price realization and lower selling, administrative and general expenses.
Outlook
Deere's worldwide sales of construction and forestry equipment are forecast to be down about 11 percent for 2016, including a negative currency-translation effect of about 2 percent. The forecast decline in sales reflects the impact of weak conditions in the North American energy sector as well as lower sales outside the U.S. and Canada.
In forestry, global sales are expected to be down 5 to 10 percent from last year's strong levels, primarily as a result of weaker demand in the U.S. and Canada.
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