Deere Posts Record 3Q Results

Deere & Co. posted fiscal third-quarter results showing net income climbed to $788 million in the three months ended July 31 from $712.3 million. Equipment sales rose 16% to $8.93 billion from $7.72 billion a year ago.

“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,” said Chairman and Chief Executive Officer Samuel Allen.

Allen is trying to meet a 2018 target of $50 billion in annual sales. Deere also has a target to get half its revenue from outside the U.S. and Canada compared with 39 percent in the 2011 fiscal year. “John Deere delivered record third quarter performance in both sales and income,” said Allen.

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.

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 & Company 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.”

Agriculture and 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.

Deere’s worldwide sales of agriculture and turf equipment are forecast to increase by about 13% for full year 2012, including a negative currency-translation impact of about 4%.