Tag Archives: sales

Jennifer DeWitt jdewitt@qctimes.com Deere & Co. Net quarterly net earnings Fueled by strong farm equipment sales, particularly in North and South America, Deere & Co. reported record earnings and sales for the third quarter Wednesday while increasing its forecast for its full-year income. The Moline-based equipment maker announced that net income jumped 26 percent on a 4 percent gain in sales and revenues. Net income for the quarter, ended July 31, was $996.5 million, or $2.56 per share. The results compared with $788 million, or $1.98 per share, for the same period last year. In a conference call with analysts Wednesday, Susan Karlix, Deere’s manager of investor relations, said the quarter marked Deere’s 13th consecutive quarter of record profits. Both sales and net income were the company’s “best-ever results” reported for a third quarter, she said. The results beat Wall Street’s expectations of $2.17 per share. The report sent Deere’s stock down $1.57 in trading Wednesday to $82.34 a share. The Quad-Cities’ largest employer raised its net income forecast for fiscal 2013 to $3.45 billion, up from $3.3 billion forecast three months ago. Company officials said, however, fourth-quarter equipment sales are expected to fall 5 percent against “a tough comparison” last year. “Last year’s fourth-quarter sales were particularly strong, in part because our factories were running at a high rate to catch up with customer orders,” Deere Chairman and CEO Samuel Allen said in a news release. “Even with this difficult comparison, our financial guidance implies a healthy level of income for the coming quarter and a third consecutive year of record results.” He added that the company’s “success is a reflection of considerable strength in the farm sector, especially in North and South America. We also are making further progress executing our wide-ranging operating and marketing plans, which call for expanding our global market presence while keeping a close watch on costs and assets.” Karlix told analysts that the lower forecast for agriculture equipment sales “does not indicate any change in our outlook for demand or global ag fundamentals.” Deere expects U.S. farm cash receipts to go down modestly, “but it still looks like they will be at historic high levels,” Deere spokesman Ken Golden said. “We know cash receipts is the No. 1 predictor of farm equipment sales,” he said, adding that farmers traditionally invest in new equipment when farm receipts are healthy. The company’s forecast predicts total U.S. farm cash receipts for 2014 to be $379.7 billion, down from the 2013 forecast of $389.8 billion. As part of the earnings report, Deere said net income for the first nine months of the year was $2.73 billion, or $6.97 per share, compared with $2.377 billion, or $5.88 per share, last year. Worldwide net sales and revenues increased 4 percent to $10.01 billion for the third quarter and rose 8 percent to $28.345 billion for nine months. In addition to agriculture and turf equipment, Deere manufactures construction and forestry equipment. The company’s financial services division also helped drive results with its 38 percent increase in third-quarter profits. Financial services reported net income of $150 million for the quarter and $407.9 million for nine months, which compared with $110.4 million and $338.6 million last year. Sales of agriculture and turf equipment rose 8 percent in the third quarter and 12 percent for the first nine months on increased prices and higher shipment volumes. Meanwhile, construction and forestry sales decreased 11 percent in the quarter and 8 percent for nine months on lower shipment volumes. Deere now forecasts ag and turf equipment sales to increase about 7 percent for 2013 and construction and forestry equipment sales to decrease by about 8 percent for the year. It predicts total equipment sales to be up about 5 percent for the fiscal year. Crediting Deere’s workforce and business model, Golden said the construction and forestry division “is holding favorable profit levels despite the fact that sales have fallen considerably.” In the release, Allen indicated his optimism for the future. “We continue to believe our investment in new products and capacity will allow Deere to be the provider of choice for a growing global customer base in the years ahead,” he said. “In our view, broad trends based on a growing, more affluent, and increasingly mobile population have ample staying power and should help the company deliver substantial value to its customers, investors and other stakeholders in the future.” The optimism also has reached the dealer level, where at least one Quad-City area John Deere dealer is having “a very good year.” Paul Seyller, the owner of River Valley Turf in Davenport and Silvis, said last year’s drought was hard on his commercial customers and kept homeowners from investing in new lawn equipment. In addition, he said commercial lawn companies were hit last winter by a lack of snow removal jobs, which provides a part of their income. “Now they’ve had a good year of mowing, and they are starting to get cash reserves built up, so in the spring (next year), they will be making more purchases than ever,” he said, adding that this year has been strong with the municipal clients and homeowners. In addition, Deere’s new line of high-performance John Deere Gators is boosting sales. “It’s the most Gators we have sold in our 15 years in business,” Seyller said. Continue reading →