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Deere posts record earnings on strong equipment sales

Keywords: Tags  Deere & Co., earnings report, Samuel R. Allen, construction, forestry, agriculture, Corinna Petry

CHICAGO — Farm, lawn and forestry equipment maker Deere & Co. posted record results for its fiscal third quarter due in part to higher equipment sales and lower raw material costs.

The Moline, Ill.-based company posted net income of $996.5 million for the three months ended July 31, up 26.5 percent from $788 million in the same period last year, on sales that increased 4.4 percent to $10.01 billion.

"John Deere is well on the road to another year of impressive performance after reporting record (fiscal) third-quarter results," chairman and chief executive officer Samuel R. Allen said in a statement Aug. 14. "Deere’s success reflects considerable strength in the farm sector, especially in North and South America. We also are making further progress executing our wide-ranging operating and marketing plans, which call for expanding our global market presence while keeping a close watch on costs and assets."

Net income for the nine months ended July 31 totaled $2.73 billion, up 14.9 percent from $2.38 billion a year earlier on revenue that increased 7.5 percent to more than $28.34 billion.

Net sales by Deere’s equipment operations alone were up 4.3 percent in the quarter and 7.8 percent year to date. Equipment sales in the United States and Canada rose 4 percent in the quarter and 9 percent year to date, while sales outside the United States and Canada increased 5 percent in the quarter and 6 percent in the nine-month period.

Higher shipment volumes also contributed to the company’s fiscal third-quarter increase in earnings, offset to some degree by higher production, selling and warranty costs, among other expenses, and unfavorable currency exchange rates, Deere said.

The company projects its equipment sales will rise 5 percent for the full year despite an anticipated fiscal fourth-quarter dip. Deere said it is forecasting healthy annual income based on a 7-percent increase in worldwide sales of agriculture and turf equipment offsetting an expected 8-percent decline in global sales of construction and forestry equipment.

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