What was Deere & Company's overall financial performance in fiscal year 2006?

Deere & Company reported strong financial results for fiscal year 2006. Net sales and revenues increased by 5% to $22.15 billion, and net income rose to $1.69 billion, or $7.18 per diluted share, up from $1.45 billion, or $5.87 per diluted share, in the previous year. This growth was supported by increases in both Equipment Operations and Financial Services.

What are the company's expectations for fiscal year 2007?

Deere & Company anticipates that overall equipment sales will be roughly flat for fiscal year 2007, with a projected increase of approximately 5% for the first quarter of 2007. Production levels are expected to decrease by about 4% in line with asset management initiatives. The company foresees a slowdown in the construction and forestry markets but remains optimistic about global agricultural economic conditions.

How did the different business segments perform?

The Equipment Operations saw a net sales increase of 2%, driven by improved price realization. The Agricultural Equipment segment experienced a 3% decrease in net sales but maintained profitability. The Commercial and Consumer Equipment segment's net sales increased by 8%, boosted by landscapes operations. The Construction and Forestry segment reported a 10% increase in net sales. The Financial Services segment's net income significantly increased, largely due to the sale of its health care operations and growth in its credit portfolio.

What is the company doing to return value to shareholders?

Deere & Company actively returned value to shareholders in 2006. The company repurchased approximately 4.45 million shares of its common stock during the fourth quarter of 2006 and paid dividends totaling $348 million. The company also announced an increase in its quarterly dividend to $0.44 per share.

DE 10-K FY2006 Annual Report — Revenue, Net Income, EPS

Summary

Deere & Company's 2006 10-K report highlights a year of solid financial performance, marked by an increase in net sales and revenues to $22.15 billion and net income of $1.69 billion. The company demonstrated strong operational execution across its key segments: Agricultural Equipment, Commercial and Consumer Equipment, and Construction and Forestry. The Financial Services segment also contributed significantly to overall profitability, driven by portfolio growth. Looking ahead, Deere anticipates a roughly flat sales performance for the full fiscal year 2007, with a projected 5% increase in the first quarter. The company is managing production levels proactively to align with market demand. Despite some regional headwinds, particularly in agriculture due to used equipment inventories and legislative uncertainty in North America, and a slowdown expected in construction and forestry, Deere remains optimistic about global farm economic conditions and the ongoing demand for its products and services. The company also reported substantial stock repurchases during the year and continued its commitment to research and development to drive future innovation.

Key Highlights

1Net sales and revenues increased 5% to $22.15 billion in fiscal year 2006.

2Net income rose to $1.69 billion, or $7.18 per diluted share, compared to $1.45 billion, or $5.87 per diluted share, in 2005.

3The Equipment Operations saw a 2% increase in net sales, with improved price realization and lower retirement benefit costs contributing to higher operating profit.

4Financial Services operations reported a significant increase in net income to $584 million, primarily due to the sale of health care operations and growth in the credit portfolio.

5The company repurchased approximately 4.45 million shares of common stock during the fourth quarter of 2006.

6Capital expenditures were $481 million for the Equipment Operations and $292 million for Financial Services, with significant investments planned for 2007.

7The company forecasts flat sales for the full year 2007, with a projected 5% increase in the first quarter.

DEERE & CO Annual Report, Year Ended Oct 31, 2006

Summary

Key Highlights

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