Deere & Co. reported a net income of $806.8 million for the fourth quarter ending Oct. 31, compared with $687.6 million for the same period last year.
Construction and forestry sales decreased 8 percent for the quarter and the full year mainly as a result of lower shipment volumes, partially offset by price realization. Operating profit was $118 million for the quarter and $378 million for the year, compared with $120 million and $476 million in 2012. Results were slightly lower for the quarter primarily because of reduced shipment volumes and higher selling, administrative and general expenses, mostly offset by price realization and lower production costs. Full-year results decreased mainly due to lower shipment volumes, a less favorable product mix, increases in production costs, and higher selling, administrative and general expenses. These factors were partially offset by price realization.
Deere's equipment operations reported operating profit of $1.114 billion for the quarter and $5.058 billion for the full year, compared with $1.051 billion and $4.397 billion in 2012. The improvement for the quarter was due primarily to the impact of price realization, partially offset by the unfavorable effects of foreign-currency exchange, lower shipment volumes and a less favorable product mix. Full-year results improved largely due to the impact of price realization and higher shipment volumes. Annual results also were impacted by unfavorable effects of foreign-currency exchange, increased production costs, higher selling, administrative and general expenses and higher warranty costs. Increased production costs were due primarily to higher manufacturing-overhead expenses in support of growth, new products and engine-emission requirements, partially offset by lower raw-material costs.
Net income of the company's equipment operations was $650 million for the fourth quarter and $2.974 billion for the full year, compared with $576 million and $2.616 billion in 2012. The operating factors mentioned above, along with a lower effective tax rate, had an impact on the quarter’s results. Increased interest expense and a higher effective tax rate also affected annual results.
Company equipment sales are projected to decrease for fiscal 2014 and be down about 2 percent for the first quarter compared with year-ago periods.
Deere's worldwide sales of construction and forestry equipment are forecast to increase by about 10 percent for 2014. The gain reflects further economic recovery and higher housing starts in the U.S., as well as sales increases outside the U.S. and Canada.