In America and international markets farm machinery maker John Deere Parts & Co. said Wednesday it lowered its full-year forecast after missing third-quarter analysts’ expectations because of weaker international demand and production delays. Shares fell 6.28 percent, closing at $75.10 per share, the biggest drop since April 2011. The Moline, Ill.-based Deere said quarterly net income rose 11 percent, to $788 million, or $1.98 per share, from $712 million, or $1.69 per share, a year earlier. Revenue was $9.59 billion, up from $8.37 billion a year ago
Sales have slowed significantly in Asia and Latin America, undermining the initial projected growth strategy at the world’s largest manufacturer of agricultural equipment as well as machinery parts. With Deere & Co planning to get at least half its sales from outside the U.S. and Canada by 2018, compared with 39 percent in fiscal 2011, and with the worst U.S. drought in five decades threatening the purchasing power of U.S. farmers, the next few years should see the farm machinery makers target the developing economies of India and Argentina as they aim for an annual revenue of $50 billion by 2018. While in Europe sales luckily remain stable with new emerging markets from the northern European markets counteracting poor sales in the south of the EU.
So despite initial setbacks with a stronger emphasis on new markets in emerging Asian and South America markets and possible demand for new more modern farm machinery to cope with Americas drought situation in future, the company could yet gain some new growth in the next few years.