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NEW YORK (AP) — Deere & Co. on Friday cut its full-year outlook because it expects the weak agriculture and energy sectors to continue dragging down equipment sales.
The agricultural equipment manufacturer has been facing a downturn in equipment sales as weak commodity prices hold back farmers from buying new equipment. Meanwhile, a weak energy sector has been dragging down construction equipment sales.
The company's stock fell $4.05, or 4.5 percent, to $86.60 in premarket trading.
The Moline, Illinois-based company earned $511.6 million, a 37 percent drop from the same period a year earlier. Earnings of $1.53 per share surpassed Wall Street expectations. The average estimate of eight analysts surveyed by Zacks Investment Research was for earnings of $1.47 per share.
The company reported an 18 percent drop in revenue to $6.84 billion in the period, which fell short of Street forecasts. Six analysts surveyed by Zacks expected $7.11 billion.
Deere reduced it's outlook for 2015 net income to $1.8 billion from $1.9 billion.
Deere said industry sales for agricultural equipment in the U.S. and Canada are forecast to be down about 25 percent for 2015. Worldwide sales of construction and forestry equipment are forecast to be down about 5 percent for the year.
Deere shares have risen 2.5 percent since the beginning of the year, while the Standard & Poor's 500 index has decreased 1 percent. The stock has climbed nearly 6 percent in the last 12 months.
Keywords: Deere, Earnings Report
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