Company calling for nine per cent sales decline
By Diego Flammini
Assistant Editor, North American Content
John Deere’s second-quarter earnings are down compared to last year.
According to the company’s May 20 release, second-quarter earnings came in at $495.4 million, compared to $690.5 million at the same time in 2015.
John Deere’s first quarter earnings were also down; $749.8 million in 2016 compared $1.077 billion at the same time in 2015.
Company executives said the lower numbers are a reflection of the current agriculture industry.
“John Deere’s second-quarter performance reflected the continuing impact of the downturn in the global farm economy,” Samuel R. Allen, chairman and CEO said in a release; he also noted a weakness in the construction equipment sector.
Going forward, the company projects a decrease of approximately eight per cent in agriculture and turf equipment sales, including a 15 to 20 per cent decrease in Canada and the United States.
The company said the decline is reflective of “the impact of low commodity prices and stagnant farm incomes, (and) is expected to be most pronounced in the sale of higher-horsepower models.”
Despite the projected declines, Allen said the company is performing “at a much higher level than in previous downturns.”
For 2016, John Deere expects its net income to be about $1.2 billion.