John Deere Capital Q4/FY Earnings Down on Spreads, Residuals & Losses

Deere & Company reported net income from its financial services subsidiary, John Deere Capital, of $81.7 million and $341.6 million for Q4/16 and full year, respectively, was down 33% and 31% from $121.8 million and $498.2 million for the respective periods in 2015.

The company said the decline for the quarter and the full year was primarily due to less-favorable financing spreads, higher losses on lease residual values and a higher provision for credit losses.

Net receivables and leases financed by JDCC were $31.999 billion at October 31, 2016, compared with $32.592 billion last year.

In its outlook, Deere said fiscal-year 2017 net income attributable to its financial services operations is expected to be approximately $480 million. The outlook reflects lower losses on lease residual values, partially offset by less-favorable financing spreads and an increased provision for credit losses.

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Terry Mulreany
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