Deere & Company reported Q4/17 net income was $510.3 million compared with $285.3 million for the quarter ended October 30, 2016. For fiscal 2017, net income was $2.16 billion compared with $1.52 billion in 2016.

Deere said worldwide net sales and revenues increased 23%, to $8.0 billion, for the fourth quarter and increased 12%, to $29.7 billion, for the full year.

Net sales of the equipment operations were $7.09 billion for the quarter and $25.89 billion for the year, compared with respective totals of $5.65 billion and $23.39 billion in 2016.

Financial services reported net income attributable to Deere & Company of $127.8 million for the quarter and $476.9 million for the year compared with $109.8 million and $467.6 million for the periods in 2016. The increases were largely due to lower losses on lease residual values, with full-year results partially offset by less-favorable financing spreads and higher selling, administrative and general expenses.

Company equipment sales are projected to increase by about 22% for fiscal 2018 and by about 38% for the first quarter compared with the same periods of 2017. Net sales and revenues are projected to increase about 19% for fiscal 2018, with net income attributable to Deere & Company of about $2.6 billion.

“John Deere has completed another successful year as markets for farm and construction equipment showed improvement and our actions to build a more durable business model yielded strong results,” said Samuel R. Allen, chairman and chief executive officer, adding that the year’s sales and earnings were the fifth-highest in company history.

Market Conditions and Outlook

• Agriculture & Turf. Deere’s worldwide sales of agriculture and turf equipment are forecast to increase by about 9% for fiscal-year 2018, including a positive currency-translation effect of about 2%. Industry sales for agricultural equipment in the U.S. and Canada are forecast to be up 5% to 10% for 2018, supported by higher demand for large equipment. Full-year industry sales in the EU28 member nations are forecast to be up about 5% due to improving conditions in the dairy and livestock sectors. South American industry sales of tractors and combines are projected to be flat to up 5% as a result of continued positive conditions, particularly in Argentina. Asian sales are forecast to be flat with strength in India offsetting weakness in China. Industry sales of turf and utility equipment in the U.S. and Canada are expected to be about flat for 2018. Deere’s turf sales are expected to outperform the industry owing to the success of new products.
• Construction & Forestry. Deere’s worldwide sales of construction and forestry equipment are anticipated to be up about 69% for 2018, including a positive currency-translation effect of about 1%. The Wirtgen acquisition is expected to add about 54% to the division’s sales for the year. The outlook reflects moderate economic growth worldwide, including higher housing starts in the U.S. and increased activity in the oil and gas sector. In forestry, global industry sales are expected to be flat to up 5% mainly as a result of improved lumber prices in North America.
• Financial Services. Fiscal-year 2018 net income attributable to Deere & Company for the financial services operations is expected to be approximately $515 million. The outlook reflects a higher average portfolio, partially offset by increased selling, administrative and general expenses.