UPDATE 3-Deere posts higher-than-expected profit but trims forecast
(Adds details on South America and the Commonwealth of Independent States; updates share movement)
By James B. Kelleher
May 14 (Reuters) - Deere & Co on Wednesday reported a stronger-than-expected quarterly profit but trimmed its outlook for full-year sales of farm equipment, citing deteriorating conditions in South America and the former Soviet Union.
Sales of the company's green-and-yellow tractors and harvesters fell a worse-than-expected 12 percent during the second quarter ended on April 30, Deere said, but cost cuts, a lower-than-expected tax rate and improved margins in its construction equipment unit helped offset that weakness.
Deere also stuck by its full-year profit forecast despite growing weakness in Argentina, where it said import tariffs were hurting tractor sales, and Brazil, where contracting margins in the sugar cane industry were discouraging capital investment.
In the Commonwealth of Independent States, Deere said geopolitical tensions between Russia and Ukraine were disrupting farm credit in the region, putting the 2014 crop at risk.
The company said sales in Kazakhstan, Belarus and Russia were also hurt by import policies. It did not elaborate.
Sales in the region will fall "significantly" this year, Deere said. It had previously said they would be "down slightly."
The company, the world's largest maker of farm equipment, had already signaled that demand for its products would fall in most markets this year following a bumper crop that sent commodity prices down. Continuación...