Deere & Company, Moline - Company expects 2015 income of about $1.9 billion

Deere & Company, Moline in agrartechnik-jobs

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Deere & Company, Moline, Illinois, November 26, 2014: Deere Announces Fourth-Quarter Earnings of $649 Million. Full-year earnings reach $3.162 billion, company's second-highest annual total. Slowdown in farm economy leads to lower profits for agricultural equipment; construction and forestry and financial-services divisions have higher results. Company expects 2015 income of about $1.9 billion. "John Deere has completed another year of solid performance in spite of weaker conditions in the global farm sector, which caused sales and earnings to decline from the record totals of 2013," said Samuel R. Allen, chairman and chief executive officer.
Quelle: John Deere GmbH & Co. KG, Mannheim / Deere & Company, Moline / agrartechnik-jobs

Net income attributable to Deere & Company was $649.2 million, or $1.83 per share, for the fourth quarter ended October 31, compared with $806.8 million, or $2.11 per share, for the same period of 2013. For fiscal 2014, net income attributable to Deere & Company was $3.162 billion, or $8.63 per share, compared with $3.537 billion, or $9.09 per share, in 2013.

Worldwide net sales and revenues decreased 5 percent, to $8.965 billion, for the fourth quarter and were down 5 percent, to $36.067 billion, for the full year. Net sales of the equipment operations were $8.043 billion for the quarter and $32.961 billion for the year, compared with $8.624 billion and $34.998 billion for the same periods in 2013.

"John Deere has completed another year of solid performance in spite of weaker conditions in the global farm sector, which caused sales and earnings to decline from the record totals of 2013," said Samuel R. Allen, chairman and chief executive officer. "The slowdown has been most pronounced in the sale of large farm machinery, including many of our most profitable models. Nevertheless, our success managing costs and assets and establishing a broad-based business lineup has allowed us to deliver strong results and remain in a sound financial condition." Further, Allen noted that the company produced healthy levels of cash flow for the year, much of which was returned to investors in the form of dividends and share repurchases. Dividends and buybacks in 2014 totaled a record $3.5 billion.

Company Outlook & Summary
Company equipment sales are projected to decrease about 15 percent for fiscal 2015 and to be down about 21 percent for the first quarter compared with year-ago periods. For fiscal 2015, net income attributable to Deere & Company is anticipated to be about $1.9 billion. "Even with a significant decline in sales and a continued pullback in the global agricultural sector, John Deere expects to remain solidly profitable in 2015," Allen said. "The company's earnings forecast reflects the impact of our efforts to establish a more resilient business model and it represents a level of performance much better than we've seen in prior downturns."

Equipment Division Performance
Agriculture & Turf. Sales fell 13 percent for the quarter and 9 percent for the full year due largely to lower shipment volumes, the previously announced sales of the company's landscapes and water operations, and the unfavorable effects of currency translation. Partially offsetting these factors was price realization for both the quarter and year.

Operating profit was $682 million for the quarter and $3.649 billion for the year, compared with $996 million and $4.680 billion in 2013. Lower results for the quarter were driven primarily by lower shipment and production volumes, a less favorable product mix, higher production costs primarily related to engine emission programs, increased warranty costs and an impairment charge for China operations. The full-year decrease was driven mainly by lower shipment and production volumes, a less favorable product mix, the unfavorable effects of foreign-currency exchange and higher production costs primarily related to engine emission programs. Declines for both periods were partially offset by price realization. As noted, last year also was affected by impairment charges for the landscapes and water operations.

Market Conditions & Outlook
Agriculture & Turf. Deere's worldwide sales of agriculture and turf equipment are forecast to decrease by about 20 percent for fiscal-year 2015 as a result of weaker conditions in the global farm economy. Lower commodity prices and falling farm incomes are putting pressure on demand for agricultural machinery, especially for larger models. Conditions are more positive in the U.S. livestock sector, providing support to the sale of smaller sizes of equipment. Based on these factors, industry sales for agricultural machinery in the U.S. and Canada are forecast to be down 25 to 30 percent for 2015.

Full-year 2015 industry sales in the EU28 are forecast to be down about 10 percent due to lower crop prices and farm incomes as well as potential pressure on the dairy sector. In South America, industry sales of tractors and combines are projected to be down about 10 percent as a result of the headwinds affecting agricultural producers. Industry sales in the Commonwealth of Independent States are expected to deteriorate further due in part to tight credit conditions. Asian sales are projected to be down slightly, with most of the decline centered in China.
Industry sales of turf and utility equipment in the U.S. and Canada are expected to be flat to up 5 percent for 2015, benefiting from general economic.
Quelle: John Deere GmbH & Co. KG, Mannheim / Deere & Company, Moline / agrartechnik-jobs