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
EquipmentTop 30 IRON WORKS Cartoons Of All Time
April 29, 2015
When CropLife IRON first started publishing more than a decade ago, long-time Publisher Al Strohmaier decided to start a cartoon Read More
EquipmentMeeting Changing Liquid Storage Needs
October 10, 2014
Tank and containment choices are expanding with shifts in farming practices and the economy. Read More
Precision AgGoogle Glass: New Tool For Ag
October 8, 2014
New wearable smart technologies such as Google Glass show potential to greatly impact how we accomplish the business of feeding the world. Read More
Equipment2014 Product Of The Year Voting
September 19, 2014
The deadline to vote for the 2014 CropLife IRON Product of the Year is October 31. Please cast your vote today to help us determine the winner. Read More
Top 100 Articles
CropLife 100The Andersons Acquires South Dakota Plant Nutrient Manufacturer Kay-Flo
May 20, 2015
The Andersons, Inc., ranked No. 22 on the CropLife 100, has purchased Kay Flo Industries of North Sioux City, SD. “This Read More
CropLife 100North Central Farmers Elevator, Wheat Growers Unification Approved By Board, Still Awaits Member Approval
May 13, 2015
The Boards of Directors for North Central Farmers Elevator (NCFE) and Wheat Growers (WG) have voted to approve the Unification Read More
CropLife 100AgGateway’s Barcoding Initiative Progressing Nicely
May 8, 2015
According to legend (or Wikipedia), the first step towards modern bar codes came back in 1948, when Bernard Silver, a Read More
CropLife 100Pinnacle Agriculture Acquires Minnesota Retailer
April 14, 2015
Pinnacle Agriculture Holdings, LLC, ranked No. 6 on the CropLife 100,  has successfully acquired Liebl Ag, LLC in Ada, MN.  Read More
CropLife 100CHS, Aurora Cooperative Complete Fertilizer Storage, Grain Shuttle Loading Facility
April 13, 2015
CHS Inc., the nation’s leading cooperative and ranked No. 5 on the CropLife 100, and Aurora Cooperative (ranked No. 21) Read More
CropLife 100GROWMARK Acquires Missouri Refined Fuels Terminal
April 2, 2015
Bloomington, IL-based GROWMARK and Magellan Pipeline Co. have entered into an agreement in which GROWMARK will acquire the refined fuels Read More
Latest News
Industry NewsBASF Sponsors Space Farming Research Project
May 26, 2015
Is it possible to produce large quantities of high quality vegetables on a space station, about 320 kilometers away from Read More
FertilizerTexas Ammonium Nitrate Bill Passes Senate, Heads To Gov…
May 26, 2015
The Texas State Senate gave final approval last Thursday to new regulations for ammonium nitrate, reports The Dallas Morning News Read More
Young corn plants
Industry NewsArysta Europe Details New Organizational Structure
May 26, 2015
Arysta LifeScience Europe recently announced a new organizational structure to leverage its scale and accelerate the company’s growth in this Read More
Syngenta Sign
Eric SfiligojMonsanto-Syngenta Could Hinge On A Judgment Of Solomon …
May 26, 2015
In the bible, the reputation of King Solomon’s wisdom in matters of despite comes from a tale of one child Read More
ManagementA New Sprayer Company & UAV Research In The Spotlig…
May 21, 2015
CropLife’s Paul Schrimpf and Eric Sfiligoj talk about a Dutch sprayer manufacturer entering the U.S. with a super-sized entry and Read More
HerbicidesFirst U.S. Sale Of Enlist Duo Herbicide Made By Dow Agr…
May 21, 2015
Dow AgroSciences has recorded the first U.S. sale of Enlist Duo herbicide with Colex-D Technology. This marks the first commercial Read More
CropLife 100The Andersons Acquires South Dakota Plant Nutrient Manu…
May 20, 2015
The Andersons, Inc., ranked No. 22 on the CropLife 100, has purchased Kay Flo Industries of North Sioux City, SD. “This Read More
EquipmentNORAC Options Coming To TerraGator
May 19, 2015
Utilizing NORAC’s Standard Control technology, boom height control is now available for TerraGators with Airmax Precision 2 and Benson Booms. This Read More
Crop InputsHelena Introduces New Soil Health Product
May 19, 2015
Helena Chemical Co. is helping agricultural producers maximize yields and efficiency with the introduction of Liquid Chisel, a new product Read More
Stewardship4R Nutrient Management Planning Certification Now Avail…
May 19, 2015
The American Society of Agronomy (ASA) and the International Certified Crop Adviser (ICCA) program announce a new specialty certification in Read More
Environmental Defense Fund logo
Paul SchrimpfEnvironmental Defense Fund: Appreciating Partners
May 19, 2015
I WAS deep in the throes of preparation for the Commodity Classic meeting that took place this past February, trying Read More
WebinarsUpcoming Webinars
May 19, 2015
Register for one of our upcoming Webinars or access our archive of past Webinars to view recordings of presentations that may be of interest to you. Read More
Syngenta Sign
Seed/BiotechSyngenta Responds To Lawyer’s Victory Claim In Vi…
May 18, 2015
A plaintiff’s lawyer has issued a public statement claiming that damages have been awarded in the Agrisure Viptera corn lawsuits Read More
StewardshipCould Australian Water Trading Approach Fit In Californ…
May 18, 2015
Ten years of drought isn’t a good thing. It doesn’t help the bottom line of farmers or the health of Read More
SpreadersDutch Sprayer Manufacturer To Enter U.S. Market
May 18, 2015
Dutch self-propelled sprayer manufacturer Agrifac Machinery has announced intentions to enter the U.S. market with two models of sprayers available Read More
FertilizerTFI Weighs In On Fertilizer Rail Transport Bill
May 14, 2015
With today’s House Committee on Transportation and Infrastructure as a backdrop, The Fertilizer Institute (TFI) registered its support for policies Read More
ManagementA Visit To The 2015 Environmental Respect Spirit Award …
May 14, 2015
CropLife’s Paul Schrimpf and Eric Sfiligoj talk about a recent visit to the CPS Spirit winner in St. Stephen’s Church, Read More
StewardshipBayer Entomologist Issues Statement On Annual Honeybee …
May 13, 2015
Richard (Dick) Rogers, Principal Scientist / Entomologist, Bayer Bee Care Center for Bayer CropScience LP, today issued the following statement Read More