Deere Reports First Quarter Earnings

Some analysts had expected Deere to post a loss in the quarter, which would have been its first operating loss in seven years. That notion helped drive Deere shares to their lowest level in six months last week, though the stock rebounded on Monday.

"Under current circumstances, it is especially gratifying to show positive results, particularly during a quarter that has historically been the seasonally weakest period for the industry," Hans Becherer, Deere chairman and CEO, said in a statement. "This is evidence of our progress in growth and quality initiatives, shows our success in achieving increased diversification of our business lines and leaves our business plans for the year on track."

The company said it continues to expect its total physical sales volume – a measure that factors out inflation and currency fluctuations – to rise about 10 percent in fiscal 2000 compared to a year ago. North American retail farm equipment sales and construction equipment sales are both expected to shrink by 5 to 10 percent for the year.

Operating profit of the commercial and consumer equipment division for the quarter was $9 million, compared with $12 million last year. However, the company expects the division to achieve further growth based on a continuing trend of strong gains and retail demand for these products. A release issued by the company stated, "These operations should continue to benefit from market-share growth, positive customer response to recently introduced products and international expansion."