NEW YORK (CNNfn) - Farm equipment producer John Deere & Co. said Tuesday that depressed agricultural commodity prices and generally lower farm incomes had dug deep into fourth-quarter earnings.
In the quarter ended Oct. 31, the company earned $162.1 million or 71 cents per diluted share, a 14 percent decrease from comparable figures of $211.3 million or 83 cents per share a year earlier.
The figure was only a slight disappointment to Wall Street, where analysts had already factored the bad news in to predicted earnings of 72 cents per share. By mid-morning, Deere stock (DE) was trading up 9/16 at 37-13/16.
Moline, Ill.-based Deere attributed the downturn to softer markets for agricultural commodities including grain, oilseed and pork. Furthermore, the company noted that farm incomes were declining not only in North America but worldwide.
Revenue fell 7 percent to $3.21 billion in the quarter from $3.44 billion in the year-ago period.
The company had earlier warned that performance in the quarter would be lower than investors had expected, and reiterated Tuesday that it expects sales to decline globally in 1999 by 13 to 15 percent, led by a sharp 23 to 25 percent fall in the first fiscal quarter.
"In this environment, the previously stated goal of reporting flat earnings per share is not achievable," the company said.
Chairman and CEO Hans Becherer said Deere has reduced spending to adapt to the changing economic situation and will pursue other means of increasing fiscal efficiency.
"We have moved aggressively to reduce production of large tractors and combines in order to keep inventories in check," he said, adding that this was in response to "levels of demand that have suffered abrupt and serious erosion."
For the full fiscal year, Deere earned $1.02 billion or $4.16 per diluted share, a 6 percent increase from the applicable prior year figures of $960.1 million or $3.78 per share.