Deere Announces 62% Increase in Q2 Earnings, Raises Outlook



Deere & Company announced net income was $802.4 million for fiscal Q2/17, up 62% compared with $495.4 million for fiscal Q2/16. For the first six months of the year, net income was $996.2 million, up 33% compared with $749.8 million last year.

Deere said worldwide net sales and revenues increased 5% to $8.287 billion, for the second quarter and increased 4% to $13.912 billion, for the first six months.

The following highlights were excerpted from the news release:

  • Financial services reported net income attributable to Deere & Company of $103.5 million for the quarter and $217.9 million for six months compared with $102.6 million and $232.0 million last year. Results for the quarter benefited from lower losses on lease residual values, largely offset by less-favorable financing spreads and higher selling, administrative and general expenses. Year-to-date results were affected by less-favorable financing spreads and higher selling, administrative and general expenses, including voluntary employee-separation expenses, partially offset by lower losses on lease residual values.
  • Equipment net sales in the United States and Canada decreased 5% for the quarter and were down 6% for the first six months. Outside the U.S. and Canada, net sales increased 14% for the quarter and 13% for the first six months, with no material effect of currency translation in either.
  • In its outlook, the company said equipment sales are projected to increase about 9% for fiscal 2017 and to rise about 18% for the third quarter compared with the same periods of 2016. Net sales and revenues are projected to increase about 9% for fiscal 2017 with net income attributable to Deere & Company of about $2.0 billion.

“John Deere reported strong results in the second quarter as market conditions showed signs of further stabilization,” said Samuel R. Allen, chairman and chief executive officer. “We are seeing modestly higher overall demand for our products, with farm machinery sales in South America experiencing a strong recovery. Deere’s performance also reflects the sound execution of our operating plans, the strength of a broad product portfolio, and the impact of our actions to develop a more agile cost structure. As a result, we have raised our forecast and are now calling for significantly higher earnings for the full year.”


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