Summary
Deere & Company's 2015 10-K filing reveals a challenging year for the company, marked by a significant decline in net income and revenues compared to 2014. This downturn is attributed to lower shipment volumes and unfavorable currency translation effects impacting both the Agriculture and Turf, and Construction and Forestry segments. The company's financial services segment, however, showed a slight increase in net income, benefiting from growth in its credit portfolio and a prior crop insurance sale, though this was partially offset by less favorable financing spreads and increased losses on residual values. Despite the weaker financial performance in 2015, management expresses confidence in the company's long-term strategy and its ability to navigate industry downturns. The outlook for fiscal year 2016 anticipates further declines in equipment sales, particularly in the agricultural sector, driven by low commodity prices and stagnant farm incomes. The company continues to focus on product innovation, meeting stringent emissions standards, and managing global risks, including currency fluctuations and economic uncertainties.
Financial Highlights
38 data points| Revenue | $28.86B |
| Cost of Revenue | $20.14B |
| Gross Profit | $8.72B |
| R&D Expenses | $1.43B |
| SG&A Expenses | $2.87B |
| Operating Expenses | $26.08B |
| Operating Income | $3.14B |
| Interest Expense | $680.00M |
| Net Income | $1.94B |
| EPS (Basic) | $5.81 |
| EPS (Diluted) | $5.77 |
| Shares Outstanding (Basic) | 333.60M |
| Shares Outstanding (Diluted) | 336.00M |
Key Highlights
- 1Deere & Company experienced a significant year-over-year decrease in net income (down 39%) and net sales and revenues (down 20%) for the fiscal year ended October 31, 2015, primarily due to lower shipment volumes and adverse currency impacts.
- 2The Agriculture and Turf segment saw a substantial drop in net sales (down 25%) and operating profit, reflecting weakness in the global agricultural sector.
- 3The Construction and Forestry segment also reported lower net sales (down 9%) and operating profit, impacted by weak conditions in certain markets.
- 4The Financial Services segment's net income attributable to Deere & Company increased slightly by 1.4% to $633 million, supported by portfolio growth but hindered by less favorable financing spreads and higher residual value losses.
- 5The company anticipates a further decline in equipment sales for fiscal year 2016, with agricultural equipment sales projected to decrease by approximately 8% globally.
- 6Deere & Company repurchased $2,771 million of its common stock in fiscal year 2015, demonstrating a commitment to returning capital to shareholders.
- 7The company's consolidated backlog of orders is expected to decrease, reflecting the anticipated lower sales volumes in the upcoming fiscal year.