Deere Construction Sales Down 11 Percent in 3Q

August 14, 2013

Deere’s third-quarter operating profit in the construction and forestry division was $107 million, compared with $113 million last year. The company attributes the 11 percent decline in sales for the quarter to decreased shipment volumes offset by price realization and lower research and development expenses.

Despite the decline in the construction and forestry division, total net income rose to $996.5 million from $788 million last year.

Worldwide net sales and revenues increased 4 percent, to $10.010 billion, for the third quarter and rose 8 percent to $28.345 billion for nine months. Net sales of the equipment operations were $9.316 billion for the quarter and $26.373 billion for nine months, compared with $8.930 billion and $24.454 billion for the same periods last year. 

Sales increased 8 percent for the quarter in the agriculture and turf division.

"John Deere is well on the road to another year of impressive performance after reporting record third-quarter results," said Samuel R. Allen, chairman and CEO. Sales and income for the period were higher than in any prior third quarter, he pointed out. "Deere's success is a reflection of 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."

Deere's worldwide sales of construction and forestry equipment are forecast to decrease by about 8 percent for 2013. The decline mostly reflects a cautious outlook for U.S. economic growth. Deere's worldwide sales of agriculture and turf equipment are forecast to increase by about 7 percent for 2013.

Company equipment sales are projected to be up about 5 percent for fiscal 2013 and to decrease by about 5 percent for the fourth quarter compared with the year-ago periods. Included is an unfavorable currency-translation impact of about 1 percent for the year. For the full year, net income attributable to Deere & Company is anticipated to be about $3.45 billion.

Full-year 2013 net income attributable to Deere & Company for the financial services operations is expected to be approximately $560 million. The forecast improvement over last year is due primarily to expected growth in the credit portfolio and lower crop insurance claims, partially offset by higher selling, administrative and general expenses.