MOLINE, Ill. (AP) — Deere cut its full-year earnings forecast Friday even as the agricultural equipment maker beat Wall Street's expectations for the first quarter. It has been dealing with weak sales of farm and construction equipment.
Its shares fell more than 3 percent in afternoon trading.
Falling commodity prices have made farmers less likely to buy new equipment. Declining oil prices have also affected its construction equipment sales.
In November the company announced that it was laying off about 220 workers.
But Deere has been effectively managing its costs. In the first quarter, total costs and expenses declined to $5.17 billion from $5.82 billion.
For the period ended Jan. 31, Deere & Co. earned $254.4 million, or 80 cents per share. That is down 34 percent from its earnings of $386.8 million, or $1.12 per share, a year earlier.
This beat the 71 cents per share that analysts surveyed by Zacks Investment Research expected.
Revenue for the Moline, Illinois-based company totaled $5.53 billion. Sales for the agriculture and turf unit dropped 12 percent in the quarter. Construction and forestry division sales fell 23 percent.
For fiscal 2016, Deere now anticipates equipment sales declining about 10 percent and earnings of approximately $1.3 billion. Its prior guidance was for equipment sales to fall 7 percent and earnings to come in at about $1.4 billion.
The company predicts equipment sales will drop approximately 8 percent in the second quarter.
Deere shares fell $2.86, or 3.6 percent, to $77.47 in afternoon trading Friday. Its shares are down almost 15 percent over the past year.
Elements of this story were generated by Automated Insights (http://automatedinsights.com/ap) using data from Zacks Investment Research. Access a Zacks stock report on DE at http://www.zacks.com/ap/DE
Keywords: Deere, Earnings Report