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
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
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
Top 100 Articles
CropLife 100The Andersons Starts Venture Capital Subsidiary
January 26, 2015
The Andersons has established Maumee Ventures, a venture capital subsidiary designed to foster promising innovations that strategically align with the company’s core businesses. Read More
CropLife 100CHS Partners With Northern Partners Coop On Fertilizer Warehouse
January 21, 2015
In addition, the two companies will form a joint venture to build and operate a grain barge loading facility that will handle corn, soybeans and wheat for export through the CHS terminal at Myrtle Grove, LA. Read More
CropLife 100Wilbur-Ellis Move To Colorado Complete
January 20, 2015
Wilbur-Ellis Co. announces the opening of its new Agribusiness Division location in the Denver, CO, Metro Area. The new facility will host key personnel as the company shifts the base of its Agribusiness operations from California to Colorado. Read More
CropLife 100United Suppliers, McGregor Co., Five Others To Form Aligned Ag Distributors
January 20, 2015
These companies will continue to operate as independently owned and operated businesses, however, their crop protection divisions will now be formally aligned under the umbrella of Aligned Ag Distributors. Read More
CropLife 100Bozeman Named SEEDWAY Chief Operating Officer
January 16, 2015
He succeeds Donald Wertman, who will retire at the end of August 2015 after 40 years with the GROWMARK subsidiary. Read More
CropLife 100Wilbur-Ellis’ Craig Bair Honored For Safety Contributions To Ag Aviation
January 14, 2015
The William O. Marsh Safety Award recognizes significant achievements in safety, safety education or an outstanding operational safety program. Read More
Latest News
CropLife 100The Andersons Starts Venture Capital Subsidiary
January 26, 2015
The Andersons has established Maumee Ventures, a venture capital subsidiary designed to foster promising innovations that strategically align with the company’s core businesses. Read More
Exclusive state-of-the art Stueve Construction designed “Vista View” Elevated Control Room.
Eric Sfiligoj2015 Agricultural Market Read: Mixed
January 26, 2015
The agricultural market could look radically different this year, profit-wise, depending upon which segment you do business in. Read More
Edward Chell Biosafe
Crop InputsBioSafe Systems Names Ed Chell California Territory Man…
January 26, 2015
BioSafe Systems has announced the recent addition of Ed Chell as California Territory Manager for the agrichemical division, supporting the crop protection, water treatment and food safety business segments. Read More
InsecticidesBayer CropScience Introduces Sivanto Insecticide
January 26, 2015
Sivanto precisely targets key damaging pests at multiple insect life stages to prevent damage to plants and help minimize the spread of diseases from insect carriers. Read More
ManagementRetail Collaboration, Communicating Agriculture’s Good …
January 23, 2015
Editors Paul Schrimpf and Eric Sfiligoj discuss the recent creation of Aligned Ag Distributors, and the US Farmers and Ranchers Read More
FertilizerOSU Expert: Toledo Water Crisis A Turning Point For Ohi…
January 23, 2015
The August 2014 water crisis in Toledo, OH, impacted Ohioans’ views of Lake Erie algae problems by increasing the attribution of blame of algae growth on agriculture. Read More
FertilizerH.J. Baker Launching TIGER XP
January 22, 2015
Tiger-Sul introduces this next generation sulphur-bentonite product with a proprietary activator – ensuring farmers have a well-balanced nutrient replacement program. Read More
Crop InputsH.J. Baker Expands China Sales Force
January 21, 2015
Global Agricultural firm H.J. Baker announced that sales veteran Shi Dongshen has joined their Shanghai office in China. This newest hire follows the recent opening of their Lianyungang Sulphur Bentonite Plant. Read More
CropLife 100CHS Partners With Northern Partners Coop On Fertilizer …
January 21, 2015
In addition, the two companies will form a joint venture to build and operate a grain barge loading facility that will handle corn, soybeans and wheat for export through the CHS terminal at Myrtle Grove, LA. Read More
Matt Hopkins5 Bold Predictions For Ag Retail In 2015
January 21, 2015
This past year was filled with ups and downs for the nation’s top ag retailers, but what will 2015 have in store? Read More
SoftwareDeere Launches App Center
January 20, 2015
The John Deere App Center provides users the ability to search and find apps most useful to their business or operations. Read More
Crop InputsNew Syngenta Herbicide Approved In Soybeans, Sunflowers
January 20, 2015
Syngenta will sell BroadAxe XC herbicide in 2015 for use on soybeans, sunflowers and dry peas Read More
CropLife 100Wilbur-Ellis Move To Colorado Complete
January 20, 2015
Wilbur-Ellis Co. announces the opening of its new Agribusiness Division location in the Denver, CO, Metro Area. The new facility will host key personnel as the company shifts the base of its Agribusiness operations from California to Colorado. Read More
Crop InputsNovozymes Sales Figures Up For 2014
January 20, 2015
Novozymes announces its sales growth in 2014 was in line with expectations as sales grew by 7% compared with 2013. Read More
CropLife 100United Suppliers, McGregor Co., Five Others To Form Ali…
January 20, 2015
These companies will continue to operate as independently owned and operated businesses, however, their crop protection divisions will now be formally aligned under the umbrella of Aligned Ag Distributors. Read More
Eric SfiligojGMO Or DNA? LOL Or WTF?
January 19, 2015
A new survey finds the American public seems generally confused when it comes to any three-letter descriptor for their food. Read More
FertilizerAGROTAIN Wins No-Till Product Of The Year Again
January 19, 2015
This marks the 10th straight year AGROTAIN nitrogen stabilizer has been named the top product in this category; no other product has matched this honor Read More
FertilizerTFI President To Give Update On Nutrient Management Eff…
January 19, 2015
The Fertilizer Institute President Chris Jahn will give the keynote address at the 2015 Ohio AgriBusiness Association Industry Conference February 4. Read More