Deere Earnings Fall but Top Wall Street Estimates

Deere's (DE) - Get Report second-quarter earnings of $1.56 a share on revenue of $7.88 billion topped Wall Street estimates.

Wall Street was anticipating earnings of $1.48 a share on revenue of $6.72 billion.

A year earlier, the Moline, Ill.-based agriculture and construction equipment manufacturer posted a profit of $2.03 a share on revenue on $8.17 billion.

Global net sales and revenues decreased 4% in the second quarter, and 8% for the first six months of fiscal 2016.

The company projected that equipment sales will decrease 9% for fiscal 2016, and that sales will be 12% lower for the third quarter from last year. Net income is anticipated to be about $1.2 billion for fiscal 2016.

Chairman and CEO Samuel Allen said in a statement that Deere is focusing on streamlining operations to make them more efficient and profitable.

"In the face of challenging market conditions, Deere's business benefited from the sound execution of operating plans, the strength of broad product portfolio and our success creating a more flexible cost structure," he said.

The stock was down slightly in premarket trading on Friday.

Softness in South America and weakness in the domestic market have impacted the company's farm machinery business, analysts have said.

Net sales of equipment fell 6% for the quarter in the U.S. and Canada, and 11% for the year so far. Outside of this region sales were down 1% in the second quarter and 4% for the first six months of the fiscal year.

The biggest losses were in construction and forestry, which saw sales decrease by 16% in the second quarter and 20% in the first six months of the fiscal year. Deere forecast that sales will be down 13% for the full fiscal year, due to weak conditions in North America.

Analysts maintained an "underweight" rating and a $69 price target for Deere.