Deere recorded net income of $511.6 million for its fiscal third quarter ended July 31, compared with $850.7 million for the same period a year ago, a 39.9 percent decrease, primarily because of poor conditions in the farm economy. Worldwide net sales and revenue plunged 20 percent to $7.594 billion, compared to $8.723 billion a year ago, and dropped 18 percent to $22.147 billion for the first nine months of the fiscal year, compared to $24.9 billion last year.
“John Deere’s third quarter results reflected the continuing impact of the downturn in the farm economy as well as lower demand for construction equipment,” said Samuel Allen, chairman and CEO. “Nevertheless, all of Deere’s businesses remained solidly profitable, benefiting from the sound execution of our business plans and the success of our efforts to develop a more agile cost structure. As a result, the company continues to be well-positioned to provide customers with technologically advanced products and services, while funding its growth plans and returning cash to stockholders.”
Equipment net sales in the United States and Canada decreased 21 percent for the quarter and 17 percent year to date. Outside the U.S. and Canada, net sales slid 23 percent for the quarter and 26 percent for nine months, with unfavorable currency-translation effects of 12 percent and 9 percent for the periods.
Construction and forestry sales decreased 13 percent for the quarter and were flat for the first nine months. Sales declined as a result of lower shipment volumes and unfavorable currency translations, partially offset by price realization. On a year-to-date basis, higher shipment volumes and price realization were offset by the unfavorable effects of currency translation.
Deere expects its worldwide sales of construction and forestry equipment to be down about 5 percent for 2015, reflecting weakening conditions in the North American energy sector as well as lower sales outside the U.S. and Canada. Forestry global sales are expected to be flat to up 5 percent, with solid results in the U.S. and Europe.
