Deere Reports Record Third-Quarter Earnings

The John Deere 4940 Sprayer.
The John Deere 4940 Sprayer.

Deere & Co. has announced worldwide net income attributable to Deere & Co. of $788.0 million, or $1.98 per share, for the third quarter ending July 31, compared with $712.3 million, or $1.69 per share, for the same period last year.

For the first nine months of the year, net income attributable to Deere & Co. was $2.377 billion, or $5.88 per share, compared with $2.130 billion, or $5.01 per share, last year.

Worldwide net sales and revenues increased 15%, to $9.590 billion, for the third quarter and rose 13% to $26.365 billion for nine months. Net sales of the equipment operations were $8.930 billion for the quarter and $24.454 billion for nine months, compared with $7.722 billion and $21.563 billion for the same periods last year.

“John Deere delivered record third quarter performance in both sales and income,” said Samuel R. Allen, chairman and CEO. “Although a strong quarter, we are not satisfied that sales fell short of our expectations due to weakening in certain international markets and short-term manufacturing inefficiencies resulting from the introduction of a record number of new products.”

Allen noted that the company’s global presence continues to grow due to strong customer preference for the innovative line-up of John Deere products that have been introduced in the past year.

Summary Of Operations

Net sales of the worldwide equipment operations increased 16% for the quarter and 13% for nine months compared with the same periods a year ago. Sales included price realization of 5% for the quarter and 4% year-to-date and an unfavorable currency-translation effect of 5% for the quarter and 3% for nine months. Equipment net sales in the U.S. and Canada increased 28% for the quarter and 18% year to date. Outside the U.S. and Canada, net sales were essentially unchanged for the quarter and increased 7% for nine months, with unfavorable currency-translation effects of 11% and 6% for these periods.

Deere’s equipment operations reported operating profit of $1.127 billion for the quarter and $3.347 billion for nine months, compared with $969 million and $2.883 billion last year. The improvement for both periods was primarily due to the impact of price realization and higher shipment volumes. These factors were partially offset by higher production costs and raw material costs, unfavorable effects of foreign currency exchange, as well as increased research and development expenses. The increase in production costs primarily related to new products and engine-emission requirements.

Financial services reported net income attributable to Deere & Co. of $110.4 million for the quarter and $338.6 million for nine months compared with $125.6 million and $348.9 million last year. Results were lower for both periods primarily due to increased selling, administrative and general expenses, narrower financing spreads and higher reserves for crop insurance claims. These factors were partially offset by growth in the credit portfolio and a lower provision for credit losses.

Company Outlook & Summary

Company equipment sales are projected to increase by about 13% for both fiscal 2012 and the fourth quarter compared with the same periods a year ago. Included is an unfavorable currency-translation impact of about 3% for the year and about 4% for the fourth quarter. For the full year, net income attributable to Deere & Co. is anticipated to be about $3.1 billion.

“Global economic conditions and dryness in several key markets warrant some caution in coming months,” Allen said. “However, this year’s drought could positively influence our outlook as it spotlights the need for John Deere’s highly productive agricultural equipment. Our new John Deere products have been well received by customers around the world. This, combined with our increased focus on improved execution, gives us confidence that Deere is well-positioned to capitalize on favorable global agricultural trends over the long term.”

Equipment Division Performance

Agriculture & Turf. Sales increased 14% for the quarter and 11% for nine months largely due to higher shipment volumes and price realization, partially offset by the unfavorable effects of currency translation.

Operating profit was $1.014 billion for the quarter and $2.991 billion year to date, compared with $859 million and $2.579 billion, respectively, last year. Results were up in both periods primarily driven by the impact of price realization and higher shipment volumes. These factors were partially offset by increased production and raw-material costs, unfavorable effects of foreign currency exchange, and higher research and development expenses.

Construction & Forestry. Construction and forestry sales increased 23% for the quarter and 24% for nine months mainly due to higher shipment volumes and price realization. Operating profit was $113 million for the quarter and $356 million for nine months, compared with $110 million and $304 million last year. Results were up for both periods primarily due to the impact of price realization and higher shipment volumes. These factors were partially offset by increased production and raw-material costs, as well as higher research and development and selling, administrative and general expenses.

Leave a Reply

Equipment Stories

Precision AgPrecision Agriculture: Finding The Payback
September 6, 2014
Profitability in precision ag is not about any one technology, but the result of employing technology in a total system approach that is agronomically sound. Read More
MAGIE 2014 ShowStopper
EquipmentJohn Deere Again Wins MAGIE ShowStopper Award
August 25, 2014
For the second consecutive year, John Deere was honored at the Midwest AG Industries Exposition (MAGIE) for its new R4045 sprayer. Read More
EquipmentDeere Announces Factory Layoffs
August 18, 2014
Deere & Co. has announced it will reduce the size of its manufacturing workforce at some agricultural equipment factories in response to current market demand for its products. Read More
A finished Willmar 16-ton side-shooting tender.
TendersNew Production Facility Helps Willmar
July 17, 2014
In 1963, a group of businessmen started Willmar. Today, a half-century later, the company is one of the ag industry’s longest-running brands. Read More

Trending Articles

FertilizerFall Fertility 2014: Forecasting Fertilizer Use
September 7, 2014
Great crops this year have tapped the soil, and fall work is definitely called for, but how challenging will that get? Read More
CropLife 100CHS To Build $3 Billion Fertilizer Plant In North Dakota
September 5, 2014
The fertilizer plant in Spiritwood will be the single largest investment in CHS history, as well as the single largest private investment project ever undertaken in North Dakota. Read More
EquipmentNew Holland Acquires Miller-St. Nazianz
September 3, 2014
The assets of Miller acquired as part of the transaction will become part of New Holland Agriculture, a CNH Industrial brand, building on a successful four-year partnership between the two companies. Read More
CropLife 100Pinnacle Acquires East Kansas Chemical
September 2, 2014
Ranked 82nd on the CropLife 100, East Kansas Chemical will operate as part of Pinnacle's Performance Agriculture brand. Read More
MAGIE 2014 ShowStopper
EquipmentJohn Deere Again Wins MAGIE ShowStopper Award
August 25, 2014
For the second consecutive year, John Deere was honored at the Midwest AG Industries Exposition (MAGIE) for its new R4045 sprayer. Read More
ManagementExpert To Discuss Farmland Value, Rent At Farm Science Review
August 18, 2014
While cropland values in Ohio increased in the past two years, they have remained flat in 2014, declining in some cases, according to an Ohio State University agricultural economist. Read More

Latest News

Equipment2014 Farm Science Review Crowd Tops 2013 Show
September 19, 2014
The 52nd annual Ohio State University Farm Science Review welcomed more than 130,000 farmers, industry professionals, FFA students and agricultural enthusiasts during the three-day event. Read More
Seed/BiotechUSDA Approves Enlist Following Rigorous Review
September 18, 2014
Dow AgroSciences now awaits EPA registration of Enlist Duo herbicide, the companion herbicide to the Enlist traits, which is expected in the near future. Read More
BlendersYargus Appoints New Plant Manager
September 18, 2014
Steve Shaffer will direct and coordinate daily operations at the company’s Marshall, IL, manufacturing plant, where the Layco line of material handling equipment is produced. Read More
CropLife 100Pinnacle Acquires Kansas-Based Cedar Ridge Supply
September 16, 2014
Cedar Ridge Supply will operate as part of Pinnacle's Performance Agriculture brand. Read More
StewardshipSecretary Vilsack Highlights Innovative Conservation Ef…
September 15, 2014
Nearly $16 million in Conservation Innovation Grants (CIGs) will be awarded to 47 organizations to help develop cutting-edge ideas to accelerate innovation in private lands conservation. Read More
Seed/BiotechSyngenta Responds To Cargill Lawsuit
September 15, 2014
Syngenta believes that the lawsuit is without merit and strongly upholds the right of growers to have access to approved new technologies. Read More
Equipment2014 Farm Science Review Launches Mobile App
September 15, 2014
Smartphone and tablet users planning on attending the 2014 Farm Science Review can now download this year’s customized mobile application. Read More
CropLife 100Southern States Coop Grower Sets Georgia Soybean Yield …
September 15, 2014
Georgia farmer Randy Dowdy's soybeans yielded an astonishing 110.66 bushels per acre, crushing the previous record of 82 bushels-per-acre. Read More
NIMITZ Treated vs Untreated pepper plant
InsecticidesNIMITZ Nematicide Approved By EPA
September 12, 2014
NIMITZ is a novel, non-fumigant nematicide with simplified application features, user safety and an active ingredient with a unique mode of action. Read More
InsecticidesMarrone Bio Innovations Receives Patent For Chromobacte…
September 11, 2014
The patent is the first step for MBI in developing a commercially viable product to inhibit infestations of corn rootworm larvae across America and other regions. Read More
HerbicidesDow AgroSciences: Keeping The Pipeline Stocked
September 11, 2014
Dow AgroSciences is embracing product diversity to drive the company’s future. Read More
CropLife 100CHS Is Official Partner Of New St. Paul Ballpark
September 10, 2014
The new ballpark in St. Paul, MN, officially became CHS Field with Twin Cities-based CHS Inc. revealed as the naming rights partner. Read More
EquipmentHagie Honors Farming Stewardship Leaders
September 10, 2014
The Iowa Farm Environmental Leader award recognizes Iowa farmers as environmental leaders that are committed to healthy soils and improved water quality. Read More
Precision AgPlantBeat: Your Plants’ Pulse In The Palm Of Your Han…
September 10, 2014
A new agronomic monitoring and recommendation service from Phytech could rewrite the book on real-time plant health status monitoring. Read More
StewardshipCCAs Making Headway With 4R Program In Lake Erie Wester…
September 9, 2014
Certified Crop Advisers are implementing the 4R Nutrient Stewardship Certification program in Lake Erie's Western Basin to improve water quality. Read More
MicronutrientsMicronutrients Going Macro
September 9, 2014
Between 2014’s fantastic growing conditions and a heightened awareness on plant nutrition, the major players in micronutrients are gearing up for another big year. Read More
Crop InputsFMC Announces Cheminova Takeover
September 8, 2014
FMC Corporation today announced that it has signed a definitive agreement to acquire Cheminova, a wholly owned subsidiary of Auriga Industries. Read More
HerbicidesValent’s Fierce XLT Herbicide Receives EPA Approv…
September 8, 2014
Valent U.S.A. Corp. announced today that Fierce XLT Soybean Herbicide is now federally registered for preemergence weed control in soybeans Read More