Deere & Co. last week announced a worldwide net loss of $222.8 million, or $0.53 per share, for the fourth quarter ended Oct. 31, compared with net income of $345.0 million, or $0.81 per share, for the same period last year. Affecting fourth-quarter 2009 results were charges of $364.8 million pretax and $321.8 million after-tax, or $0.76 per share, because of the previously announced impairment of goodwill related to the John Deere Landscapes reporting unit and voluntary employee-separation expenses associated with the formation of the new agriculture and turf division. Without the items, earnings for the quarter would have been $99.0 million, or $0.23 per share.
For the full year, net income was $873.5 million, or $2.06 per share, compared with $2.05 billion, or $4.70 per share, last year. Included in the year’s net income are the items cited above, which totaled $380.6 million pretax and $331.8 million after-tax, or $0.78 per share, on an annual basis.
Worldwide net sales and revenues declined 28 percent, to $5.33 billion, for the fourth quarter and were down 19 percent, to $23.11 billion, for the full year. Net sales of the equipment operations were $4.73 billion for the quarter and $20.76 billion for the year, compared with $6.73 billion and $25.8 billion last year.
“In the face of intense global economic pressure, John Deere has completed a solidly profitable year and maintained its strong financial condition,” said Samuel Allen, president and CEO. “All our businesses are benefiting from the consistent execution of plans to keep a tight rein on costs and inventories. In addition, Deere has made further progress extending its competitive position through a relentless focus on customers and a steady investment in new projects, products and geographies.”
Net sales of the worldwide equipment operations decreased 30 percent for the quarter and were down 20 percent for the year. Sales included a favorable currency-translation effect of 1 percent for the quarter and an unfavorable currency-translation effect of 4 percent for the year. Also included in sales was price realization of 3 percent for the quarter and 5 percent for the year. Equipment net sales in the United States and Canada declined 26 percent for the quarter and 14 percent for the year. Net sales outside the United States and Canada were down 35 percent for the quarter and 28 percent for the year, with a favorable currency-translation effect of 1 percent for the quarter and an unfavorable currency-translation effect of 8 percent for the year.
Deere’s equipment operations reported an operating loss of $22 million for the quarter and operating profit of $1.37 billion for the year, compared with operating profit of $549 million and $2.93 billion for the same periods last year. The deterioration in the quarter primarily was due to lower shipment and production volumes, a goodwill impairment charge, unfavorable effects of foreign exchange and voluntary employee-separation expenses. Partially offsetting these factors were lower raw-material costs, improved price realization and lower selling, administrative and general expenses.
Equipment operations reported a net loss of $201 million for the quarter and net income of $678 million for the year, compared with net income of $268 million and $1.68 billion last year. The operating factors mentioned above, in addition to unfavorable tax effects, had an impact on both quarterly and full-year results.
Financial services reported a net loss of $15.3 million for the quarter and net income of $202.5 million for the full year versus net income of $69.9 million and $337.4 million for the comparable periods last year. Quarterly results were lower largely due to the reversal and deferral of wind energy tax credits eligible for cash grants and a higher provision for credit losses. Other factors included higher losses on residual values for construction-equipment operating leases and lower commissions from crop insurance.
Company equipment sales are projected to be down about 1 percent for fiscal 2010 and be down about 10 percent for the first quarter compared with the same periods a year ago.
“Thanks in large part to their dedication and hard work, our operations have remained on a solid footing and our plans for meeting the world’s growing need for food and infrastructure are continuing to move forward,” Allen said.
John Deere Capital Corp.’s net income was $21.2 million for the fourth quarter and $149.2 million for the year, compared with net income of $57.7 million and $282.4 million for the respective periods last year.
Net receivables and leases financed by JDCC were $18.97 billion at Oct. 31, compared with $18.85 billion last year. Net receivables and leases administered, which include receivables administered but not owned, totaled $19.09 billion at Oct. 31, compared with $19.01 billion a year ago.
Deere & Co. is headquartered in Moline, Ill.