Deere & Company net income in the third quarter of 2015 (ended July 31) was $511.6 million, or $1.53 per share; nearly 40% less than Q3 2014.
For the first nine months of the year, Deere & Company net income was down 37% to $1.6 billion, or $4.67 per share.
Worldwide net sales and revenues decreased 20% to $7.594 billion for the third quarter and were down 18%, to $22.147 billion, for nine months.
Net sales of the equipment operations were down 22% to $6.8 billion for the quarter and down 20% for the year’s first nine months to $19.8 billion.
Deere's equipment operations reported a 47% drop in operating profit to $601 million for the quarter, and a 46% drop over nine months to $1.8 billion. For both periods, the decline was due primarily to lower shipment volumes, the impact of a less favorable product mix, and the unfavorable effects of foreign-currency exchange. These factors were partially offset by price realization and lower production costs for the quarter and by price realization, lower selling, administrative and general expenses, and lower production costs for the year to date.
Agriculture & Turf Division sales fell 24% for the quarter and 25% for nine months. Operating profit was down 50% to $472 million for the quarter and down 54% to $1.378 billion year to date.
Construction & Forestry Division sales dropped 13% for the quarter and were flat for the first nine months. Operating profit fell 34% to $129 million for the quarter, but rose 19% to $464 million through the first nine months of the year.
Deere 2015 Outlook & Summary
Company equipment sales are projected to decrease about 21% for fiscal 2015; -25% in the Ag & Turf Division and -5% in Construction & Forestry. Included in the forecast is a negative foreign-currency translation effect of about 4% for the year. For fiscal 2015, net income attributable to Deere & Company is anticipated to be about $1.8 billion.
According to Samuel R. Allen, chairman and chief executive officer, Deere's performance in 2015 underscores its success establishing a wider range of revenue sources and more durable business model. "By continuing to report solid profits in a difficult environment, the company is showing great resilience and performing much better than in previous agricultural downturns."
Longer term, Allen said he remained quite confident about the company’s prospects. "We believe our steady investment in new products and geographies will make Deere the provider of choice for a growing global customer base and that the impact of these actions will become increasingly clear when our end markets recover," said Allen. "In our view, favorable trends based on a growing, more affluent, and increasingly mobile population, have ample staying power. For all these reasons, we have confidence in the company’s present course and its ability to deliver significant value to customers and investors in the years ahead."
