Deere & Co.’s sales for the third quarter declined 11% as the farm spending doldrums continued but the agricultural equipment maker still maintained a profit through rigorous cost-cutting.
Deere reported Friday that worldwide net sales and revenues fell to $6.724 billion while net income dropped 4% year-on-year to $489 million, or $1.55 per share. It was the company’s 10th straight quarterly drop in revenues and profits.
But analysts had forecast earnings of $94 a share and Deere now expects to earn $1.35 billion this year, up from its May forecast of $1.2 billion.
“All of Deere’s businesses remained profitable with the Agriculture & Turf division reporting higher operating profit than last year,” CEO Samuel R. Allen said in a news release. “As in past quarters, our results benefited from the sound execution of our operating plans, the impact of a broad product portfolio, and our success keeping a tight rein on costs and assets.”
As The Wall Street Journal reports, the world’s largest seller of farm tractors and harvesting combines “has been struggling through a prolonged slump in U.S. farm machinery demand, crimped by lower prices for corn, soybeans and other commodities that has lowered farmers incomes and forced them to pull back on equipment spending.”
Deere has responded to the headwinds by controlling expenses to maintain a profit. For the third quarter, expenses declined in several key categories, with overall spending dropping to $6.02 billion from $6.85 billion.
While Deere’s sales of agricultural and turf equipment slipped 11% to $4.7 billion, operating profit was $571 million for the quarter and $1.329 billion year to date, compared with $472 million and $1.378 billion, respectively, last year.
The company has announced nearly 1,400 layoffs since the start of 2015. “We are continuing to focus on ways to make our operations more efficient and achieve further structural cost reductions,” Allen said.
In trading Friday. Deere shares rose more than 12% to $86.21, two percentage points shy of the 52-week high.