Deere & Co.’s net income for its fiscal third quarter ended July 31 spiked 46.9 percent from $420 million, or 99 cents per share for last year’s third quarter to $617 million ($1.44 per share) for the recently concluded quarter. The company said sales to independent rental companies have rebounded sharply from last year’s weak levels.
For the first nine months of the fiscal year, net income was $1.408 billion ($3.28 per share) compared with $1.096 billion ($2.59 per share) for the first nine months of the previous fiscal year, a 28.5-percent leap.
Worldwide net sales increased 16 percent to $6.837 billion for the third quarter, and 6 percent to $18.803 billion for the nine-month period. Net sales of equipment operations were $6.224 billion for the quarter and $17.009 billion for nine months, up from $5.283 billion in last year’s third quarter (a 17.8-percent hike), and $16.030 billion for the nine-month period (a 6.1-percent jump.)
“John Deere’s third-quarter performance reflected the disciplined execution of our business plans and occurred despite continued weakness in certain key sectors,” said Samuel Allen, chairman and CEO. “While we have benefited from positive conditions in the U.S. farm sector, particularly in terms of demand for large equipment, European markets are down sharply. Demand for construction and forestry equipment is improved from last year but still remains far below normal levels.”
Benefiting the quarter’s results were higher production and shipment volumes and improved price realization, partially offset by increased postretirement benefit costs.
Construction and forestry sales rose 59 percent for the quarter and were up 29 percent for nine months as a result of higher shipment volumes. The division had operating profit of $66 million for the quarter and $65 million for nine months, compared with last year’s operating losses of $28 million in the quarter and $85 million for nine months.
Financial services net income was $102.1 million for the quarter and $274.1 million for nine months, compared with $102.1 million and $217.8 million last year. Results were unchanged for the quarter and higher for nine months primarily because of improved financing spreads and a lower provision for credit losses.
Construction equipment sales are projected to be up about 12 percent for fiscal 2010 and up about 32 percent for the fourth quarter compared with the same periods a year ago.
“John Deere remains well positioned to help meet the world’s growing need for agricultural commodities, shelter and infrastructure,” Allen said. “In our view, these developments hold exciting potential and should strongly support our efforts to deliver value for customers and investors well into the future.”
Deere’s worldwide sales of construction and forestry equipment are forecast to increase by about 35 percent for full-year 2010. The increase reflects market conditions that are improved in relation to last year’s depressed environment, as well as the division’s focus on aligning factory production with demand from retail customers.
Deere is based in Moline, Ill.