CHICAGO - Heavy equipment maker Deere & Co. reported Nov. 21 a fiscal fourth-quarter profit, reversing last year’s loss for the same quarter. However, higher costs for promotional programs and new product development hurt earnings for the quarter.
Although the results missed analysts’ forecasts, a bullish forecast from the Moline, Ill., company - which manufactures equipment for farming and construction as well as commercial and consumer lawn care - drove its stock to its highest level in three and a half months.
In the fourth quarter ended Oct. 31, 2000, Deere said it earned $71.1 million, or 30 cents per share, on revenue of $3.38 billion. According to a First Call/Thomson Financial survey, analysts were expecting the company to report a 39-cent profit.
In the same quarter in 1999, Deere lost $29.5 million, or 13 cents per share, including a $40 million charge taken in connection with early retirement of some employees, on revenue of $2.79 billion.OUTLOOK MAY BE CHALLENGING. UBS Warburg analyst David Bleustein called Deere's fourth quarter “pretty ugly” and said he was surprised that the company expects to outperform all the markets it is in - agricultural equipment, construction equipment and commercial consumer equipment. “That could be challenging,” Bleustein said.
The company said it expected commercial and consumer equipment sales to be slightly lower industry wide in 2001 compared with 2000. It also said it said it sees a softer construction market, although it expected sales of its own construction equipment to firm slightly.
In a press release, Deere Chairman and CEO Robert Lane said, “Deere is in an excellent position to improve its financial and operating performance in 2001 … In addition, we are pleased with the positive response of our customers to the company's many new innovative products, and believe that significant progress has been made in bringing down used-equipment inventories.”
The author is a Reuters news writer.
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