09 July 1998
New Holland signals hard times
ahead for agricultural machinery
TOUGHER times ahead were forecast for agricultural machinery after New Holland yesterday warned stiffer competition was eating into profit margins.
The sector has experienced strong growth in recent years on the back of buoyant markets for agricultural equipment.
New Holland, one of the worlds four biggest manufacturers of farm machinery, said net revenues for the second quarter would be down slightly on last year largely because of “competitive discounting” by other suppliers.
Net revenues in the first half overall would be “in line” with last year, it said. It said earnings per share in the first half would be slightly above last years $1.56 but the statement was interpreted as indicating that profits may come under pressure in the second half.
The company said the recent drop in sales in Asia had been greater than expected while markets in Africa and the Middle East had also declined. Also a forecast decline in sales in Europe had offset a strong period of sales growth in North America.
The Financial Times reports there are other signs of weakening in key markets for farm machinery with the Asian financial crisis contributing to the problems.
- Financial Times 09/07/98 page 36