10:20 AM EDT, 05/16/2024 (MT Newswires) -- Deere (DE) cut its full-year profit outlook on Thursday as lower shipment volumes dragged down the agriculture and construction equipment manufacturer's fiscal second-quarter results year-on-year.

The company now expects net income of about $7 billion for fiscal 2024 versus its previous forecast of $7.5 billion to $7.75 billion. The current consensus on Capital IQ is for $7.49 billion. The stock was down 3.2% in Thursday's trading session.

Sales in the company's production and precision agriculture segment are anticipated to fall by 20% to 25% for the ongoing fiscal year, compared with its prior outlook for a roughly 20% decrease. Small agriculture and turf sales are poised to drop by 20% to 25%, worse than the prior guidance for a 10% to 15% slide.

Deere continues to project revenue in the construction and forestry division to be down 5% to 10% for the year.

"We are proactively managing our production and inventory levels to adapt to demand changes and position the business for the future," Chief Executive John May said in a statement. "Despite market conditions, we are committed to our strategy and are actively investing in and deploying innovative technologies, products, and solutions to ensure our customers' success."

For the three months through April 28, the maker of mowers, tractors and bulldozers recorded per-share earnings of $8.53, slipping from $9.65 a year earlier, but topping the Street's view for $7.92. Net sales tumbled to $13.61 billion from $16.08 billion, but were ahead of analysts' $13.32 billion estimate. Total revenue, including interest and other income, fell 12% to $15.24 billion.

Revenue from production and precision agriculture equipment plummeted 16% to $6.58 billion, while small agriculture and turf equipment slumped 23% to $3.19 billion. Sales in construction and forestry moved down 7% to $3.84 billion. All three segments were weighed down by lower shipment volumes, which also impacted their operating profits, Deere said.

"We continue to demonstrate structurally higher performance levels across business cycles and are benefitting from stability in construction end markets amid declining agricultural and turf demand," according to May.

Financial services net income soared to $162 million from $28 million in the 2023 quarter, due to income earned on higher average portfolio balances. Total costs and expenses fell to $12.12 billion from $13.54 billion.

Price: 399.74, Change: -14.28, Percent Change: -3.45