Despite the increase in second quarter earnings by 2.7 percent, the maker of farm machinery Deere & Co. (NYSE:DE) presented a cautious outlook on its sales forecast for the year. This clipping of sales forecast was owed to the cool and wet weather prevailing in the United States which would in turn hamper the farm crop and reduce demand for farm machinery.
Sales Forecasts
The world’s largest seller of tractor and harvesting combines, Deere & Co. (NYSE:DE) beat analyst estimates over its second quarter revenue. However, the experts were also expecting the farm machinery maker to increase the sales forecast for the year. The Chief Executive Officer, Samuel Allen reported that the lingering economic concerns in various parts of the world are tempering the sales forecast for Deere & Co. (NYSE:DE) in the near term.
The CEO further noted that the wet weather prevailing in US had delayed crop planting, slowed down the construction industry and hurt the sales of turf care equipments – all of which had led to cautious sales forecast for the company. Deere & Co. (NYSE:DE) further noted that high prices for crops and government financing aid to purchase farm equipments have stoked the sales forecast of its machinery in South America.
The company forecasts industry sales of its farm machinery in US and Canada would increase by about 5 percent over the previous year. On the other hand, Deere & Co. (NYSE:DE) forecasts that its sales in South America would be up by about 15 to 20 percent over the previous year.
