- Lower demand for agricultural and construction equipment leads to decline in sales and
- All businesses remain solidly profitable.
- Results aided by sound execution and cost management.
MOLINE, Ill. — Net income attributable to Deere & Company was $511.6 million, or $1.53 per share, for the third quarter ended July 31, compared with $850.7 million, or $2.33 per share, for the same period last year.
For the first nine months of the year, net income attributable to Deere & Company was $1.589 billion, or $4.67 per share, compared with $2.513 billion, or $6.79 per share, last year.
Worldwide net sales and revenues decreased 20%, to $7.594 billion, for the third quarter and were down 18%, to $22.147 billion, for nine months. Net sales of the equipment operations were $6.840 billion for the quarter and $19.843 billion for nine months, compared with $8.723 billion and $24.918 billion for the periods last year.
“John Deere’s third-quarter results reflected the continuing impact of the downturn inthe farm economy as well as lower demand for construction equipment,” said Samuel R. Allen, chairman and chief executive officer. “Nevertheless, all of Deere’s businesses remained solidly profitable, benefiting from the sound execution of our business plans and the success of our efforts to develop a more agile cost structure. As a result, the company continues to be well-positioned to provide customers with technologically advanced products and services, while funding its growth plans and returning cash to stockholders.”
Net sales of the worldwide equipment operations declined 22% for the quarter and 20% for nine months compared with the same periods a year ago. Sales included price realization of 2% for the quarter and nine months. Additionally, sales included an unfavorable currency-translation effect of 6 percent for the quarter and 4 percent for nine months. Equipment net sales in the United States and Canada decreased 21% for the quarter and 17% year to date. Outside the U.S. and Canada, net sales fell 23% for the quarter and 26% for nine months, with unfavorable currencytranslation effects of 12% and 9% for the periods.
Agriculture & Turf
Sales fell 24% for the quarter and 25% for nine months due largely to lower shipment volumes and the unfavorable effects of currency translation. These factors were partially offset by price realization. Operating profit was $472 million for the quarter and $1.378 billion year to date, compared with $941 million and $2.967 billion, respectively, last year. Lower results for both periods were driven primarily by the impact of lower shipment volumes, a less favorable product mix, and the unfavorable effects of foreign-currency exchange. Partially offsetting these factors were price realization and lower production costs in the third quarter and price realization, lower selling, administrative and general expenses, and lower production costs for the first nine months.
Company Outlook & Summary
Company equipment sales are projected to decrease about 21% for fiscal 2015 and to be down about 2% for the fourth quarter compared with year-ago periods. Included in the forecast is a negative foreign-currency translation effect of about 4% for the full year and 5% for the fourth quarter. For fiscal 2015, net income attributable to Deere & Company is anticipated to be about $1.8 billion.
Third Quarter 2015 Results
(in millions of dollars)
3 Month Ended
9 Months Ended
|2015||2014||% Change||2015||2014||% Change|
Net sales and revenues
|Agriculture and turf||$5,308||$6,969||-24||$15,155||$20,211||-25|
|Construction and forestry||1,532||1,754||-13||4,688||4,707|
|Total net sales||6,840||8,723||-22||19,842||24,918||-2-|
|Total net sales and revenues||$7,594||$9,500||-20||$22,147||$27,102||-18|
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