Deere Announces Record Second-Quarter Earnings of $1.084 Billion

Wed May 15, 2013 - National Edition
CEG


Image courtesy of Deere & Company.  Deere & Company has reported that Net income was $1.084 billion, or $2.76 per share, for the second quarter ended April 30, compared with $1.056 billion, or $2.61 per share, for the same period last year.
Image courtesy of Deere & Company. Deere & Company has reported that Net income was $1.084 billion, or $2.76 per share, for the second quarter ended April 30, compared with $1.056 billion, or $2.61 per share, for the same period last year.

Deere & Company has reported that Net income was $1.084 billion, or $2.76 per share, for the second quarter ended April 30, compared with $1.056 billion, or $2.61 per share, for the same period last year.

For the first six months of the year, net income attributable to Deere & Company was $1.734 billion, or $4.41 per share, compared with $1.589 billion, or $3.91 per share, last year.

Worldwide net sales and revenues increased 9 percent, to $10.914 billion, for the second quarter and rose 9 percent to $18.335 billion for six months. Net sales of the equipment operations were $10.265 billion for the quarter and $17.058 billion for six months, compared with $9.405 billion and $15.524 billion for the periods last year.

"After a record-setting second quarter, John Deere is well on its way to another year of strong performance," said Samuel R. Allen, chairman and chief executive officer. Second-quarter sales and income were the highest for any quarterly period in company history, he pointed out. "Deere’s results are a reflection of positive conditions in the global farm economy, which continues to show impressive strength. The company’s performance also offers further proof of the adept execution of our operating and marketing plans, which are aimed at expanding our global market presence."

Summary of Operations

Net sales of the worldwide equipment operations increased 9 percent for the quarter and 10 percent for six months compared with the same periods a year ago. Sales included price realization of 3 percent for the quarter and year to date and an unfavorable currency-translation effect of 2 percent for the quarter and 1 percent for six months. Equipment net sales in the United States and Canada increased 9 percent for the quarter and 13 percent year to date. Outside the U.S. and Canada, net sales increased 9 percent for the quarter and 6 percent for six months, with unfavorable currency-translation effects of 4 percent and 3 percent for the periods.

Deere’s equipment operations reported operating profit of $1.663 billion for the quarter and $2.500 billion for six months, compared with $1.522 billion and $2.220 billion last year. The improvement for both periods was due primarily to the impact of price realization and higher shipment volumes. These factors were partially offset by increased production costs and higher selling, administrative and general expenses as well as unfavorable effects of foreign-currency exchange. The higher production costs were related primarily to manufacturing overhead expenses in support of growth and new products, engine-emission requirements, and postretirement benefit expenses. These items were partially offset by lower raw-material costs. In addition, higher warranty costs and research and development expenses affected year-to-date results.

Net income of the company’s equipment operations was $953 million for the second quarter and $1.478 billion for the first six months, compared with $947 million and $1.362 billion in 2012. The operating factors mentioned above, along with a higher effective tax rate and increased interest expense, affected both quarterly and year-to-date results.

Financial services reported net income attributable to Deere & Company of $125.0 million for the quarter and $257.9 million for six months compared with $109.2 million and $228.3 million last year. Results were higher for both periods primarily due to growth in the credit portfolio, partially offset by increased selling, administrative and general expenses. In addition, last year’s six-month results benefited from revenue related to wind energy credits.