Deere & Company, maker of the iconic green John Deere tractors and farm equipment, on Friday reported a 30% drop in second quarter earnings as low crop prices have farmers buying fewer machines.
"Lower commodity prices and falling farm incomes are putting pressure on demand for agricultural machinery, especially for larger models. Conditions are more positive in the U.S. livestock sector, supporting the sale of smaller sizes of equipment," the company said.
Going forward, the company forecast fiscal year 2015 agriculture and turf equipment sales to be down about 24%, which includes pressure from unfavorable foreign currency exchange.
Net income for the quarter ended April 30 was $690.5 million, or $2.03 per share, compared with $980.7 million, or $2.65, a year earlier.
Revenue was $8.17 billion, down 18% from the $9.95 billion a year earlier.
"Deere's construction and forestry and financial-services divisions had higher results for the quarter, and our agriculture and turf operations remained solidly profitable despite lower demand for large models of farm machinery," Chief Executive Samuel R. Allen said in the earnings release.
Net sales in its global equipment business were down 20% for the quarter. That included a 14% decline in the United States and Canada and a 28% drop elsewhere.
The earnings statement can be seen online.