Deere Posts Big Jumps in Q4 and Full Year Profit and Volume
Net income attributable to Deere & Co. was $510.3 million, or $1.57 per share in fourth quarter ended Oct. 29, compared with $285.3 million, or $0.90 per share, for the fiscal fourth quarter of 2016, a 78.9-percent leap. For the full fiscal year 2017, net income was $2.159 billion, or $6.68 per share, compared with $1.524 billion or $4.81 per share for fiscal 2016, a 41.7-percent surge.
Worldwide net sales and revenues increased 23 percent to $8.018 billion for the fourth quarter. For the full fiscal year, worldwide revenues jumped 12 percent to $29.738 billion. Net sales of the equipment operations were $7.094 billion for the quarter, compared to $5.650 billion in the year-ago quarter, a 25.6-percent leap. For the full year net sales for the equipment operation were $25.885 billion compared with $23.387 billion for 2016, a 10.7-percent hike.
“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 Allen, chairman and CEO. Allen added that the year’s sales and earnings were the fifth-highest in the company’s history.
“We saw higher overall demand for our products with farm machinery sales in South America making especially strong gains and construction equipment sales rising sharply,” he said. “At the same time, the company realized continued benefits from its broad product portfolio and agile cost structure. As a result, Deere has remained well-positioned to serve present customers while making investments aimed at driving growth and attracting additional customers in the future.”
During the year, Deere acquired the Wirtgen Group, the world’s leading manufacturer of road construction equipment. The transaction will be finalized next month. “Wirtgen will establish Deere as a substantially more prominent player in global construction equipment markets,” Allen added.
Equipment net sales in the United States and Canada increased 23 percent for the quarter and 5 percent for the year. Outside the U.S. and Canada, net sales increased 30 percent for the quarter and 20 percent for the year, with a favorable currency translation effect of 3 percent and 1 percent respectively.
Net income of the company’s equipment operations was $417 million for the fourth quarter, more than double the same period in 2016 with $185 million. For the full year, net income of the equipment operations was $1.707 billion for the full year compared with $1.058 billion in 2016, a 61.3-percent leap.
Construction and forestry sales increased 37 percent for the quarter and 17 percent for the year because of higher shipment volumes, price realization and favorable currency effects.
Deere expects a 69-percent jump in construction and forestry in 2018, with the Wirtgen acquisition adding about 54 percent for the division’s sales. The outlook reflects moderate worldwide economic growth including higher housing starts in the U.S. and increased activity in the oil-and-gas sector.
About the Author
Michael Roth
Editor
Michael Roth has covered the equipment rental industry full time for RER since 1989 and has served as the magazine’s editor in chief since 1994. He has nearly 30 years experience as a professional journalist. Roth has visited hundreds of rental centers and industry manufacturers, written hundreds of feature stories for RER and thousands of news stories for the magazine and its electronic newsletter RER Reports. Roth has interviewed leading executives for most of the industry’s largest rental companies and manufacturers as well as hundreds of smaller independent companies. He has visited with and reported on rental companies and manufacturers in Europe, Central America and Asia as well as Mexico, Canada and the United States. Roth was co-founder of RER Reports, the industry’s first weekly newsletter, which began as a fax newsletter in 1996, and later became an online newsletter. Roth has spoken at conventions sponsored by the American Rental Association, Associated Equipment Distributors, California Rental Association and other industry events and has spoken before industry groups in several countries. He lives and works in Los Angeles when he’s not traveling to cover industry events.