Deere Sees Sales Growth in First Quarter

Deere posted weaker-than-expected first quarter earnings Friday, citing unsettled conditions in key markets.

The company reported that while first-quarter sales for its worldwide agriculture and turf division rose 10 percent compared to the first quarter last year, operating profit for the division saw a 10 percent drop.

Agriculture and turf sales for the quarter increased due to higher shipment volumes and price realization, partially offset by the unfavorable effects of currency translation and higher warranty-related expenses. Operating profit declined mainly as a result of higher production costs, higher warranty-related expenses, a less favorable product mix, and higher research -and-development expenses, largely offset by price realization and higher shipment volumes.

Although Deere has made solid progress on many fronts and reported higher earnings for the quarter, its results were hurt by higher costs for raw materials and logistics, as well as by customer concerns over tariffs and trade policies, said CEO Sam Allen.

These latter issues have weighed on market sentiment and caused farmers to become more cautious about making major purchases.