Deere & Co. last week announced worldwide net income of $345.0 million, or $0.81 per share, for the fourth quarter ended Oct. 31, compared with $422.1 million, or $0.94 per share, for the same period last year. For the full year, net income was a record $2.1 billion, or $4.70 per share, compared with $1.8 billion, or $4.00 per share, last year.

Worldwide net sales and revenues increased 21 percent, to $7.4 billion, for the fourth quarter and were up 18 percent, to $28.4 billion, for the full year. Net sales of the equipment operations were $6.7 billion for the quarter and $25.8 billion for the full year, compared with $5.4 billion and $21.5 billion for the respective periods last year.

"In the face of highly uncertain global economic conditions, John Deere has completed a fifth consecutive year of record earnings, reflecting our efforts to build and grow a great business," said Robert Lane, chairman and CEO. Agricultural equipment operations had their best year ever in 2008, he pointed out, and the company's other equipment businesses remained solidly profitable on a full-year basis. "Demand for productive agricultural machinery has continued to be strong due in large part to the financial health of the farm sector, which has remained positive to date," Lane said. "Deere's performance has received further support from our successful credit operation, which is benefiting from strong asset quality and continued low losses."

Net sales of the worldwide equipment operations increased 24 percent for the quarter and 20 percent for the year. Included were positive effects for currency translation and price changes of 3 percent for the quarter and 6 percent for the full year. Equipment net sales in the United States and Canada were up 16 percent for the quarter and 9 percent for the full year. Net sales outside the United States and Canada increased by 39 percent for the quarter and 40 percent for the year, including a positive currency-translation effect of 10 percent for the year.

Deere's equipment operations reported operating profit of $549 million for the quarter and $2.9 billion for the year, compared with $511 million and $2.3 billion for the periods last year. The improvement for both periods was largely due to the favorable impact of higher shipment volumes and improved price realization, partially offset by increased raw material costs and higher research and development expenses. The quarter's results included pretax expenses of approximately $50 million to close a facility in Canada, while higher selling, administrative and general expenses had an impact on the full year.

Equipment operations reported net income of $268 million for the quarter and $1.7 billion for the year, compared with $319 million and $1.4 billion last year. Unfavorable currency translation had a negative effect on the quarter's performance.

Financial services reported net income of $69.9 million for the quarter and $337.4 million for the full year versus $96.9 million and $363.7 million for the comparable periods last year. Results were lower for both periods primarily due to higher selling, administrative and general expenses, an increase in average leverage, unfavorable currency translation and a higher provision for credit losses. In addition, quarterly results were lower as a result of narrower financing spreads. Both periods benefited from growth in the average credit portfolio and increased commissions from crop insurance.

"Given the sudden, sharp downturn in global economic activity, and the ongoing turmoil in world financial markets, the outlook for the year ahead is highly uncertain and its impact on John Deere's operations is difficult to assess," Lane said. "We have no doubt, however, that our ongoing focus on cost control and disciplined asset management, supported by a conservative capital structure and a lineup of advanced products and services, will allow the company to move ahead and compete successfully in today's volatile markets."

Subject to the economic uncertainties noted, company equipment sales are projected to be about flat for the full year of 2009 and up about 7 percent for the first quarter. Included in the forecast is a negative currency-translation impact of about 6 percent for both the full year and first quarter. Deere's net income is forecast to be about $1.9 billion for 2009 and about $275 million for the first quarter.

In spite of the present economic situation, Deere remains encouraged by its growth prospects and believes that trends favorable to its businesses remain intact. These trends include increasing global demand for farm commodities and renewable fuels, as well as a growing need over time for shelter and infrastructure. "We're proceeding with investments to capitalize on these positive developments," Lane said. "They continue to hold considerable promise, in our view, and should bring benefit to the company and its investors for years to come."

In the company’s Construction & Forestry division, sales were up 3 percent for the quarter and down 4 percent for the full year. Operating profit was $89 million for the quarter and $466 million for the year, versus $134 million and $571 million a year ago. Operating profit was lower for the quarter primarily due to higher raw material costs. The decline in operating profit for the year largely resulted from lower shipment volumes and higher raw material costs, partially offset by improved price realization.

U.S. markets for construction and forestry equipment are forecast to remain under pressure because of further deterioration in the already-weakened housing sector, a steep decline in nonresidential construction, and negative economic growth. The global economic slowdown is expected to lead to a lower level of forestry equipment sales in both the United States and Europe. Deere's worldwide sales of construction and forestry equipment are forecast to decline by approximately 12 percent for the year. Despite the poor economic climate, company sales are expected to benefit from innovative new products.

Deere & Co. is headquartered in Moline, Ill.