Deere’s construction and forestry machinery sales decreased 16% in 2Q

The construction and forestry machinery division of Deere & Company decreased sales by 16% to $1.365 billion in the second quarter of the business year 2015/16, ending at the end of April, company reported. Operating profit was $74 million, compared with $189 million for the periods last year. Operating profit decreased mainly due to lower shipment volumes, higher sales-incentive costs and a less favorable product mix, partially offset by lower production costs and lower selling, administrative and general expenses.

Deere’s worldwide sales of construction and forestry equipment are forecast to be down about 13% for 2016, including a negative currency-translation effect of about 1%. The forecast decline in sales largely reflects the impact of weak conditions in North America. In forestry, global industry sales are expected to be down 5-10% from last year’s strong levels, company said in a statement.