Deere & Co. (NYSE: DE) reported fiscal first-quarter 2015 results before markets opened Friday. The farm and heavy equipment maker posted diluted earnings per share (EPS) of $1.12 on revenues of $6.38 billion. In the same period a year ago, the company reported adjusted EPS of $1.81 on revenues of $6.95 billion. First-quarter results also compare to the Thomson Reuters consensus estimates for EPS of $0.83 and $5.53 billion in revenues.

Compared with the first quarter of last year, Deere’s results this year were battered by lower demand for agricultural machinery, which was down 27% year-over-year. Yet, compared with the rather horrific results analysts expected, Deere hit a home run.

Deere has revised its outlook since the end of the prior quarter, now projecting equipment sales to decrease by 17% in 2015 and to drop by 19% in the second quarter. Currency exchange effects are expect to have a negative impact of about 3% to Deere’s full year sales and about 4% on the second quarter. Fiscal year net income is now forecast at $1.8 billion, compared with net income for fiscal 2014 of $3.16 billion.

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The company’s lowered outlook is even gloomier than it was in October at the end of Deere’s 2014 fiscal year. But the difference is virtually all due to a stronger dollar. If the dollar stops — or even slows — it pace of appreciation, Deere could surprise to the upside, compared with current consensus estimates for second quarter EPS of $1.71 on revenues of $7.98 billion.

The company’s CEO said:

Deere’s first-quarter performance reflected sluggish conditions in the global farm sector, which reduced demand for agricultural machinery, particularly larger models, and led to lower sales and income. At the same time, our construction and forestry and financial services divisions had higher profits, showing the benefit of a well-rounded business lineup. Deere’s results also demonstrated the progress we’ve made creating a more flexible, responsive cost structure.

As we have already noted, sales in the company’s agriculture and turf division dropped 27% year-over-year in the quarter. Construction and forestry equipment sales rose 13%. Sales in the agriculture and turf division are forecast to drop 23% in fiscal year 2015, including a negative currency effect of 4%. Sales of construction and forestry equipment are expected to rise by 5% in the year. Ag and turf revenues contributed 73% of first quarter 2014 total sales, compared with about 64% of first quarter 2015 sales.

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Operating profit fell 40% across all the company’s divisions, with agriculture and turf profit down 60%, construction and turf profit up 55%, and financial services profits up 28%. The bad news is that ag and turf profits comprised about 80% of Deere’s first-quarter 2014 profit and about 41% of first-quarter 2015 profit.

Shares of Deere traded down about 0.6% in the premarket Friday to $91.11. The 52-week range is $78.88 to $94.89. Thomson Reuters had a consensus analyst price target of around $85.30 before the report.

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