Deere Equipment Sales Down 20% in Q3

August 24, 2015

Worldwide net sales and revenues decreased 20 percent, to $7.594 billion, for the third quarter and were down 18 percent, to $22.147 billion, for nine months. Net sales of the equipment operations were $6.840 billion for the quarter and $19.843 billion for nine months, compared with $8.723 billion and $24.918 billion for the periods last year. 

Net sales of the worldwide equipment operations declined 22 percent for the quarter and 20 percent for nine months compared with the same periods a year ago. Sales included price realization of 2 percent for the quarter and nine months. Additionally, sales included an unfavorable currency-translation effect of 6 percent for the quarter and 4 percent for nine months. Equipment net sales in the United States and Canada decreased 21 percent for the quarter and 17 percent year to date. Outside the U.S. and Canada, net sales fell 23 percent for the quarter and 26 percent for nine months, with unfavorable currency-translation effects of 12 percent and 9 percent for the periods. 

Deere's equipment operations reported operating profit of $601 million for the quarter and $1.842 billion for nine months, compared with $1.135 billion and $3.387 billion last year. 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.

Net income of the company's equipment operations was $344 million for the third quarter and $1.109 billion for the first nine months, compared with $680 million and $2.061 billion in 2014. In addition to the operating factors mentioned above, a lower effective tax rate benefited both quarterly and year-to-date results. 

Deere & Company net income was $511.6 million, or $1.53 per share, for the third quarter, compared with $850.7 million, or $2.33 per share, for the same period last year. 

For the first nine months of the year, net income attributable to Deere & Company was $1.589 billion, or $4.67 per share, compared with $2.513 billion, or $6.79 per share, last year. 

Deere's worldwide sales of construction and forestry equipment are forecast to be down about 5 percent for 2015, including a negative currency-translation effect of about 3 percent.

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