24 August 2001

Action to arrest big fall in Deere income pledged

By Andy Collings

Low commodity prices and the general economic slowdown are to blame for a dramatic fall in Deeres income, says chief executive Robert Lane.

Although still in the black, third quarter net income plummeted from $172m last year to $72m on net sales and revenues of $3.584bn. Fourth quarter margins are also expected to be under significant pressure.

As a result, rigorous asset management and expense reduction remain a top priority for the company. "We are continuing to take aggressive actions to further strengthen our competitiveness and drive more efficient asset levels," says Mr Lane.

"These steps, which include additional production cut backs and an early retirement programme, are expected to have an adverse impact on fourth quarter results."

Deeres worldwide agricultural equipment division has reported operating profit of $115m for the third quarter, which is $43m down on the same period last year.

For the companys European operation, however, Mr Lane points out that the outlook for agricultural sales has improved slightly due to the easing of concerns over foot-and-mouth disease.

Industry retail sales in Europe are now expected to be 10% less than last year – significantly better than previously forecast. &#42