Deere Raises Revenues 30 Percent in Fiscal 2023 Second Quarter
Deere & Co. posted $17.387 billion in total net sales and revenues in the fiscal second quarter of 2023 ended April 30, compared to $13.370 billion for the same period in fiscal 2022, a 30-percent increase. Production & precision agriculture net sales totaled $7.822 billion compared to $5.117 billion a year ago, a 52.9-percent year-over-year jump. Small agricuture & turf marked $4.145 billion in sales compared to $3.570 billion a year ago, a 16.1 percent increase.
The Construction & Forestry category reported $4.112 billion in net sales compared to $3.347 billion a year ago, a 22.9-percent jump. Construction & Forestry did about the same for the first six months of the fiscal year, with $7.314 billion in fiscal 2023 compared to $5.891 billion for the first six months of 2022, a 24.2-percent uptick.
“As shown by the company’s outstanding second-quarter results, Deere continues to benefit from favorable market conditions and an improving operating environment,” said John C. May, chairman and CEO. “We also are being helped by the sound execution of our business plans by our employees, dealers, and suppliers. They are doing an exceptional job meeting demand for our products and serving customers. Though supply-chain constraints continue to present a challenge, we are seeing further improvement.”
Company Outlook & Summary
Net income attributable to Deere & Company for fiscal 2023 is forecast to be in a range of $9.25 billion to $9.50 billion.
“Based on Deere’s results to date, it’s clear we are well on our way to another year of exceptional achievement,” May said. “This is due in no small part to the success of our smart industrial operating model and our ability to provide value to our customers by helping them be more profitable, productive, and sustainable.”
Notes related to Russia and Deere-Hitachi ventures
In the second quarter of 2022, the company suspended shipments of machines and service parts to Russia. The suspension of shipments reduced actual and forecasted revenue for the region, which made it probably future cash flows will not cover the carrying value of certain assets. The accounting consequences during the second quarter of 2022 were impairments of most long-lived assets, an increase in reserve of certain financial assets, an an accrual for various contractual uncertainties.
In the second quarter of 2022, the company acquired full ownership of three former Deere-Hitachi joint venture factories and began new license and supply agreements with Hitachi Construction Machinery Co. The remeasurement of the previously held equity investments resulted in a non-cash gain of $326 million, pre-tax and after-tax.
