Equipment maker Deere & Co. on Wednesday said it expects a 20% drop in global sales of agriculture and turf equipment in its 2015 fiscal year because of weaker conditions in the farm economy.
"Lower commodity prices and falling farm incomes are putting pressure on demand for agricultural machinery, especially for larger models. Conditions are more positive in the U.S. livestock sector, providing support to the sale of smaller sizes of equipment," the company said in its quarterly earnings report.
The company's 2014 fiscal year concluded Oct. 31 and it reported fourth quarter income of $649.2 million, or $1.83 a share, compared with $806.8, or $2.11, a year earlier. Annual income was $3.162 billion, or $8.63 a share, compared with nearly $3.54 billion, or $9.09. a year earlier.
"John Deere has completed another year of solid performance in spite of weaker conditions in the global farm sector, which caused sales and earnings to decline from the record totals of 2013," Samuel R. Allen, chairman and chief executive officer, said in the statement. "The slowdown has been most pronounced in the sale of large farm machinery, including many of our most profitable models."
Despite the expected slowdown in sales in the coming year, Allen said "John Deere expects to remain solidly profitable in 2015."