John Deere's new 85G excavator at work.
Worldwide net sales and revenues for John Deere’s fiscal first quarter ended Jan. 29 increased 1.8 percent year over year to $5.625 billion compared with $5.525 billion a year ago. Net sales of equipment operations declined 1.5 percent to $4.698 billion compared with $4.769 billion a year ago. Net income was $193.8 million or $0.61 per share compared with $254.4 million or $0.80 per share a year ago.
Equipment net sales in the United States and Canada decreased 8 percent, while outside of the U.S. and Canada, net sales hiked 11 percent.
“John Deere has started out the year on a positive note in the continued face of soft market conditions,” said Samuel Allen, chairman and CEO. “Although the quarter’s sales andwere somewhat lower than last year, all of our businesses remained solidly profitable. Deere’s performance showed further benefits from the sound execution of its operating plans, the strength of a broad product portfolio and the impact of a more flexible cost structure. At the same time, we are seeing signs that after several years of steep declines key agricultural markets may be stabilizing.”
Deere’s equipment operations reported operating profit of $247 million for the quarter, compared with $214 million in 2016. The improvement was primarily driven by price realization, partially offset by expenses associated with voluntary employee-separation programs, higher warranty costs and unfavorable currency exchange.
Net income of the company’s equipment operations was $80 million compared with $127 million for the same period a year ago.
Deere expects equipment sales to increase about 4 percent for fiscal 2017 and go up about 1 percent in the second quarter compared to the same periods a year ago.
Deere’s worldwide sales of construction and forestry equipment are forecast to increase about 7 percent in 2017, a reflection of moderate economic growth worldwide.