Farm and construction machinery manufacturer Deere & Co. (NYSE: DE – $78.01) said it had net income of $254.4 million, or $0.80 a share, in its first fiscal quarter ended Jan. 31, down from $386.8 million, or $1.12 per share in the year-earlier period. Revenue fell 13% to $5.53 billion, worse than the 11% decline Deere had predicted. The consensus estimate, however, was for $0.71/share and revenue of $4.89 billion. The decline in the US and Canada was 18%, with the rest of the world down half that. Outside North America would have logged 2% equipment-sales growth absent currency fluctuations. Looking ahead, Deere is expecting full-year equipment sales to fall about 10%, and to be down about 8% in the second quarter. Full-year net income is forecast at about $1.3 billion, equal to around $4.10 per share vs. $4.24 that the Street had expected. Deere will probably slow production levels of high-horsepower machines and rely more on sales of small equipment, which is experiencing greater demand. Lower horsepower equipment, however, commands lower margins. A less favorable product mix and the adverse effects of a strong U.S. dollar should offset reduced sales and administrative expense and a steep decline in costs of goods sold. The shares were strong earlier this week on news that Berkshire Hathaway has increased its position in Deere and now holds 5% of the total shares outstanding. The good quality stock can be held for recovery as crop prices slowly improve and construction spending rises. The amply covered dividend yields 3%.