Deere Beats Street but Trims Outlook

MOLINE, Ill. (TheStreet) -- Deere & Co.(DE Quote) made good on what some had been predicting: a quarterly profit that handily exceeded Wall Street targets, combined with another round of ratcheted-down financial guidance.

Deere shares were under pressure in the early going Wednesday -- perhaps due to some profit-taking after a sharp run-up in the previous session, ahead of the earnings report, and perhaps because of Deere's reduced outlook. The company's stock was changing hands at $43.54, down $1.55, or 3.4%.

Before the opening bell Wednesday, the company said its profit in the just-ended fiscal third quarter received a boost from "strength in the U.S. market for large farm machinery," and, perhaps more importantly, "our efforts to keep a tight rein on costs and inventories."

This was especially the case in the company's reeling construction and forestry division, laid low by the bursting of the housing bubble, but where Deere is "successfully executing carefully designed plans to adjust expenses and asset levels in response to the severe decline in its markets," according to the company's press release.

Deere said third-quarter revenue dropped 24% to about $5.9 billion from a year ago. Net income, meanwhile, fell 27% to $420 million, or 99 cents a share. Analysts were expecting 57 cents a share on revenue of $5.25 billion.

Looking ahead, Deere said it expects equipment sales to fall 34% in the fourth quarter and 21% in the full fiscal year compared with 2008. That annual sales decline is steeper than the company's earlier prediction of a 19% drop.