Deere & Co. (NYSE: DE) reported fiscal fourth quarter and full-year 2014 results before markets opened Wednesday morning. For the quarter, the farm and heavy equipment maker posted diluted earnings per share (EPS) of $1.83 on revenues of $8.97 billion. In the same period a year ago, the company reported adjusted EPS of $2.11 on revenues of $9.45 billion. Fourth-quarter results compare to the Thomson Reuters consensus estimates for EPS of $1.57 and $7.75 billion in revenues.

For the full fiscal year Deere posted EPS of $8.63 on revenues of $36.07 billion compared with EPS of $9.09 and revenues of $37.8 billion in the prior year. The consensus estimates called for EPS of $8.35 on revenues of $32.9 billion.

The bad news came from Deere’s outlook for its new fiscal year. Equipment sales are forecast to fall 15% for the year and to be down about 21% for the first fiscal quarter. Net income for the year is now estimated at $1.9 billion, down from $3.16 billion in 2014 and $3.54 billion in 2013. That number alone will send shares skidding today.

The company cut its full-year net income expectation from $3.3 billion to $3.1 billion on a sales decline of about 6% for the full year and a drop of 8% in the fourth quarter. The estimates include a 1% negative impact from currency translation effects.  In fiscal year 2013 the company’s revenues totaled $35 billion from which we calculate total revenue in 2014 of around $32.9 billion. The current full-year consensus estimates call for EPS of $8.40 on revenues of $33.56 billion.

The company’s CEO said:

Even with a significant decline in sales and a continued pullback in the global agricultural sector, John Deere expects to remain solidly profitable in 2015. The company’s earnings forecast reflects the impact of our efforts to establish a more resilient business model and it represents a level of performance much better than we’ve seen in prior downturns. Global trends based on population growth and rising living standards remain intact and are largely unaffected by periodic swings in the farm economy. At the same time, Deere’s plans for serving a larger global customer base are making good progress. As a result, we are confident the company is positioned to earn solid returns throughout the business cycle and to realize substantial benefits from the world’s growing need for food, shelter and infrastructure in the years ahead.

Sales in the company’s agriculture and turf division dropped 13% year-over-year in the quarter, and construction and forestry equipment sales were up 23%. Agriculture and turf sales dropped 9% in the 2014 fiscal year, while construction and forestry equipment sales rose 12% for the year.

Deere expects agriculture and turf equipment sales to fall about 20% worldwide next year and by 25% to 30% in North America. Lower commodity prices and falling farm incomes are pressuring demand for agricultural machinery, especially larger models.

Shares of Deere are trading down about 2.8% in the pre-market Wednesday morning, at $85.30. The 52-week range is $78.88 to $94.89. Thomson Reuters had a consensus analyst price target of around $83.50 before today’s report.

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