Deere Reports 4th Quarter Results
Deere has reported net income of $687.6 million, for the fourth quarter ended October 31, compared with $669.6 million, for the same period last year.
For fiscal 2012, net income attributable to Deere & Company was $3.065 billion, compared with $2.800 billion in 2011.
Worldwide net sales and revenues rose 14%, to $9.792 billion, for the fourth quarter and increased 13% to $36.157 billion for the full year. Net sales of the equipment operations were $9.047 billion for the quarter and $33.501 billion for the year, compared with $7.903 billion and $29.466 billion for the same periods in 2011.
“In the face of continuing global economic pressure, John Deere has completed another record year,” said Samuel R. Allen, chairman and chief executive officer. “Our success reflects positive customer response to our lines of innovative equipment coupled with extensive efforts to expand our global competitive position.”
During the year, Deere continued with the record introduction of new products, while opening or moving ahead with new factories in China, India, and Brazil. In the U.S., the company announced capacity expansions for tractors, sprayers, and cylinders. “John Deere’s performance illustrates the continuing impact of our operating model, which stresses a disciplined approach to cost and asset management,” Allen said. “As a result, we are achieving strong financial results and generating high levels of cash flow. These dollars are funding growth activities throughout the world and providing value directly to investors.”
Deere Agriculture & Turf sales increased 16% for the quarter and 13% for the year largely due to higher shipment volumes and price realization, partially offset by the unfavorable effects of currency translation.
Operating profit was $931 million for the quarter and $3.921 billion for the year, compared with $868 million and $3.447 billion, respectively, in 2011. The improvement in both periods was primarily due to the impact of higher shipment volumes and price realization. Results in the quarter were partially offset by higher production costs and increased selling, administrative and general, and research and development expenses. Also affecting fourth-quarter performance was a goodwill impairment charge and unfavorable effects of foreign currency exchange. For the full year, results were partially offset by higher production and raw-material costs, unfavorable effects of foreign currency exchange, and increased research and development, and selling, administrative and general expenses.
Deere’s worldwide sales of agriculture and turf equipment are forecast to increase by about 4% for fiscal year 2013. Relatively high commodity prices and strong farm incomes are expected to continue supporting a favorable level of demand for farm machinery during the year. Deere’s sales are expected to benefit from global expansion and lines of advanced new equipment.
Industry sales for agricultural machinery in the U.S. and Canada are forecast to be about flat for 2013 in relation to the prior year’s healthy levels. Caution around the U.S. livestock and dairy sectors is expected to offset continued strength in demand for large equipment such as high-horsepower tractors.
Full-year industry sales in the EU27 are forecast to be flat to down 5% due to continuing deterioration in the overall economy and a poor harvest in the U.K. Sales in the Commonwealth of Independent States are expected to be modestly higher in 2013.
In South America, industry sales are projected to be up about 10% as a result of favorable commodity prices and higher planting intentions.
Industry sales in Asia are projected to be little-changed from 2012 due to softer economic conditions in India and China.
U.S. and Canada industry sales of turf and utility equipment are expected to be up about 5% for 2013, reflecting some improvement in the U.S. economy. Deere’s sales are expected to increase more than the industry due to the impact of new products.