Deere Posts 18 Percent Drop In Fiscal Q4 Earnings

November 26, 2008 5:38 p.m. EST

Moline, IL (AHN) - Deere & Co. announced Wednesday fiscal fourth quarter earnings fell 18 percent on rising costs and slumping profits from its credit business.

The farm equipment maker posted fourth quarter earnings of $345 million or 81 cents a share, down from $422 million or 94 cents a share in the same period a year ago.

Revenue was robust, up 21 percent to $7.4 billion. Strong sales overseas helped fuel revenue growth. Sales of agricultural equipment were also strong, up 43 percent to $4.57 billion.

The results were mixed with earnings falling well short of estimates for 99 cents a share. However, revenue was well ahead of the $6.8 billion analysts were expecting, according to Thomson Reuters.

Deere's credit business showed the most weakness as its financial services posted a 28 percent decline in the fourth quarter due to higher provisions, increased expenses and unfavorable currency rates.

For the year, Deere earned $2.05 billion or $4.70 a share, up from $1.82 billion or $4 a share last year.

Looking forward, Deere expects fiscal first quarter profits to fall roughly 25 percent to $275 million. Analysts are expecting earnings of 363.1 million.

"Given the sudden, sharp downturn in global economic activity, and the ongoing turmoil in world financial markets, the outlook for the year ahead is highly uncertain and its impact on John Deere's operations is difficult to assess," Chief Executive Robert Lane said, according to MarketWatch.