UPDATE 2-Deere raises 2015 profit outlook despite weak farm market
(Rewrites first paragraph, adds analyst comment, stock move)
By Nick Carey
CHICAGO May 22 (Reuters) - Deere & Co on Friday reported a higher-than-expected quarterly profit and raised its full-year outlook after cost cuts helped compensate for weakening demand for its farm equipment.
The company's shares rose nearly 4 percent after the earnings announcement.
"We are pleased to see Deere management proactively attacking costs... amid the agriculture downturn," Edward Jones equity analyst Matt Arnold wrote in a note for clients. "We remain constructive on the long-term outlook for Deere, and we continue to believe the current share price reflects an overly conservative scenario."
Deere said sales would fall 19 percent in the year ending Oct. 31, compared with its previous forecast of a 17 percent drop. It blamed the decline in part on a stronger U.S. dollar, which reduces the value of goods sold overseas.
Sales for agricultural equipment in the United States and Canada should fall about 25 percent this year, Deere said.
Lower commodity prices and falling farm incomes are putting pressure on demand for agricultural machinery, especially for larger models, the Moline, Illinois-based company said.
Deere, which gets nearly two-thirds of revenue from these products, also forecast a 17 percent profit drop for the current, third quarter. Continued...