John Deere Reports Record First Quarter Income

After two years of bad news of cost cutting and disappointing sales, John Deere is reporting increases in the first quarter income, coming in at $513.7 million, or $1.20 per share, for the first quarter ended January 31, compared with $243.2 million, or $0.57 per share, for the same period last year.

Worldwide net sales and revenues for the first quarter increased 27 percent, to $6.119 billion, compared with $4.835 billion last year. Net sales of the equipment operations were $5.514 billion for the quarter compared with $4.237 billion a year ago.

“John Deere’s first-quarter results reflect improving demand for our innovative lines of equipment coupled with the skillful execution of our business plans,” said Samuel R. Allen, chairman and chief executive officer. “Our actions are helping attract customers through advanced new products and technologies.” Sales of large farm machinery, particularly in the United States and Canada, are continuing to make a major impact, while construction equipment shipments are experiencing some degree of recovery, Allen noted. “Our record first-quarter performance is especially gratifying in light of market conditions that remain below normal levels in certain key sectors.”

Company Outlook and Summary
Company equipment sales now are projected to be up 18 to 20 percent for fiscal 2011 and up about 25 percent for the second quarter compared with the same periods of the previous year. Included is a favorable currency-translation impact of about 2 percent for the year and the quarter. Net income attributable to Deere & Company is anticipated to be approximately $2.5 billion for the full year.

With Deere’s strong first-quarter performance and positive outlook for 2011, the company remains well-positioned to capitalize on positive global economic trends while providing significant value to investors, Allen said. “Our balanced approach to cash flow management means we will continue setting the stage for future sales and earnings gains through the aggressive funding of organic growth while also remaining focused on returning cash directly to shareholders,” noted Allen. “We’re confident this approach will produce solid value for our customers, investors and other constituents over the long term.”

Equipment Division Performance
Agriculture and Turf: Sales increased 21 percent for the quarter largely due to higher shipment volumes and improved price realization. Operating profit was $558 million compared with $352 million for the quarter last year. The improvement was primarily due to higher shipment and production volumes as well as improved price realization, partially offset by increased raw-material costs and higher incentive-compensation expenses.

Construction and Forestry: Construction and forestry sales climbed 81 percent, resulting in operating profit of $88 million. Last year the division had an operating loss of $37 million for the quarter. Contributing to the increase were significantly higher shipment and production volumes as well as improved price realization, partially offset by increased raw-material costs and higher incentive-compensation expenses.