Deere: Demand Strong for Ag Equipment; C/E Continues Recovery
Deere & Company announced record worldwide net income of $788.0 million for the third quarter ended July 31, compared with $712.3 million for the same period last year. For the first nine months of the year, net income was $2.377 billion compared with $2.130 billion last year.
Worldwide net sales and revenues increased 15 percent, to $9.590 billion, for the third quarter and rose 13 percent to $26.365 billion for nine months. Net sales of the equipment operations were $8.930 billion for the quarter and $24.454 billion for nine months, compared with $7.722 billion and $21.563 billion for the same periods last year.
Deere said demand remained strong for U.S. farm equipment while construction continues solid recovery. The company said it is forecasting record full-year income of approximately $3.1 billion.
In its outlook, Deere said industry sales for agricultural machinery in the U.S. and Canada are forecast to be up more than 10% for 2012. Worldwide sales of construction and forestry equipment are forecast to increase by about 17% for 2012. While construction equipment sales in the U.S. continue to show strong recovery, Deere said it has experienced slower than expected sales activity in some international markets. World forestry markets are projected to be flat in comparison to 2011.
The following was excerpted from the news release on financial services:
Financial services reported net income attributable to Deere & Company of $110.4 million for the quarter and $338.6 million for nine months compared with $125.6 million and $348.9 million last year. Results were lower for both periods primarily due to increased selling, administrative and general expenses, narrower financing spreads and higher reserves for crop insurance claims. These factors were partially offset by growth in the credit portfolio and a lower provision for credit losses.
In its outlook for the financial services business, the company said full year 2012 net income for the financial services operations is expected to be approximately $450 million, somewhat lower than the prior year. The forecast decline is primarily due to an anticipated increase in selling, administrative and general expenses, narrower financing spreads and higher reserves for crop insurance claims, partially offset by growth in the credit portfolio.
Deere said net receivables and leases financed by John Deere Capital were $25.766 billion at July 31, 2012, compared with $22.925 billion last year.
To read the Deere & Co. news release click here.