LONDON (ShareCast) - (Sharecast News) - Deere & Company reported a slide in fourth-quarter income and slashed its forecasts on Wednesday, hurt by poor weather in America's farming heartland and Washington's ongoing spate with Beijing.
The US firm behind John Deere tractors and combine harvesters said net income in the three months to 3 November was $722.0m or $2.27 per share, compared to $785.0m or $2.42 per share a year earlier. Adjusted earnings per share meanwhile fell from $2.30 to $2.14.

Chief executive John May said: "John Deere's performance reflected continued uncertainties in the agricultural sector. Lingering trade tensions coupled with a year of difficult growing and harvesting conditions have caused many farmers to become cautious about making major investments in new equipment. Additionally, financial services results have come under pressure due to operating lease losses.

"At the same time, general economic conditions have remained favourable. This has supported demand for smaller equipment and led to solid results for Deere's construction and forestry business, which had a record year for sales and operating profit."

Worldwide, net sales rose 5% to $9.896bn in the fourth quarter, and by 5% to $39.258bn for the full year. Net income for the year was $3.253bn, compared to $2.368bn a year earlier.

Looking to the current year's performance, however, Deere warned that its profits would suffer and slashed its forecasts for 2020 net income to between $2.7bn to $3.1bn. Worldwide sales in both its agriculture and turf and construction and forestry arms were predicted to fall by 5-10% and 10-15%, respectively.

Yet May insisted: "Despite present challenges, the longer-term outlook for our businesses remains healthy and points to a promising future for Deere. We are particularly encouraged by the adoption of precision technologies and believe we are well-positioned to be a leader in the delivery of smarter, more efficient and sustainable solutions to our customers.

"At the same time, we are committed to the successful executive of our strategic plan and have initiated a series of measures to create a leaner organisational structure that can operate with more speed and agility."

As at 1300 GMT, shares in Deere were 4% lower in pre-market trading.

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