|
Deere posts 4Q loss
|
 |
November 20, 2001: 12:16 p.m. ET
Company plans plant closing, almost 500 layoffs, to reduce costs.
|
NEW YORK (CNN/Money) - Deere & Co., a leading U.S. producer of farm equipment, reported its largest quarterly loss in 10 years Tuesday, announcing cost-cutting efforts including a plant closing, consolidation and layoffs.
Company officials attributed the fiscal fourth-quarter loss to production cutbacks, weaker foreign currencies and lower shipments across its equipment divisions due to an economic slowdown.
Excluding one-time items, the Moline, Ill.-based company reported a loss of $103.5 million, or 45 cents a share, compared with earnings of $71.1 million, or 30 cents a share, in the year-earlier period.
Analysts had forecast a loss of 46 cents a share, according to earnings tracker First Call.
Including special items, Deere (DE: down $3.28 to $38.29, Research, Estimates) reported a loss of $320.1 million, or $1.36 a share. Fourth-quarter sales and revenue fell to $3.16 billion from $3.38 billion a year ago.
"Fourth-quarter results were adversely affected by production cutbacks aimed at driving more efficient asset levels and by continued weakness in our major markets," Chairman and CEO Robert Lane said.
Deere officials also said Tuesday they plan to close and sell the company's Loudon, Tenn., plant in an effort to reduce costs and improve operating effectiveness. They estimated that about 300 of the plant's 420 employees would be laid off. Company officials said the engineering, production and marketing of its skid-steer loader product line, now based in Loudon, would move to Dubuque, Iowa.
The company expects to incur pretax charges of about $30 million primarily in the first quarter from the close.
In addition, Deere officials said the company plans to consolidate its corporate headquarters in Moline, Ill., including the layoffs of 200-to-250 of its 2,500 employees.
"Cleary, their big problem is end-market demand," said Robert McCarthy, an analyst at Robert W. Baird & Co. "Given the current and prospective operating results and market economy, an incremental employment reduction shouldn't come as any major surprise. The Street is probably disappointed there is not a stronger outlook for the farm equipment division given the host of new product announcements in the fall."
The company anticipates sales will be down 3 percent-to-7 percent in the current quarter from a year ago, with equipment sales for the full year flat to up slightly. Profit margins in the equipment divisions will be "under significant pressure," it said, citing manufacturing inefficiencies resulting from lowered production.
Deere shares closed at $41.57 Monday. 
-- from staff and wire reports
|
|
|
|
|
|
|
