01—Abstract
Summary
Summary of the 10-K filed December 17, 2018. Cited figures are marked; the original filing is the authoritative source.
Deere & Company (DE) reported strong results for the fiscal year ending October 27, 2018, with net income attributable to the company reaching $2.37 billiona, a significant increase from the previous year.
This growth was driven by a substantial rise in net sales and revenues to $37.36 billionb, up 26% year-over-year. The acquisition of the Wirtgen Group in December 2017 was a major contributor, adding 12% to net sales. The company's equipment operations saw strong performance, particularly in the Agriculture and Turf segment, with improved shipment volumes, price realization, and lower warranty costs driving operating profit.
The Financial Services segment also performed well, with higher average portfolios and a lower provision for credit losses contributing to increased net income. Looking ahead to fiscal year 2019, Deere anticipates continued sales growth of approximately 7%c, driven by a full year of Wirtgen sales and continued demand in key markets.
However, foreign currency translation is expected to have an unfavorable impact of about 2%. The company forecasts net income attributable to Deere & Company to be around $3.6 billiond, signaling continued confidence in its market position and product offerings, particularly in precision technologies.
02—Key points
Key Highlights
- **Robust Financial Performance:** Net income attributable to Deere & Company was $2.37 billion in fiscal year 2018, up from $2.16 billion in fiscal year 2017.
- **Significant Revenue Growth:** Total net sales and revenues increased by 26% to $37.36 billion in fiscal year 2018, driven by strong performance across segments and the acquisition of Wirtgen Group.
- **Wirtgen Acquisition Impact:** The acquisition of Wirtgen Group in December 2017 significantly boosted net sales, contributing 12% to the overall increase.
- **Strong Equipment Operations:** The Agriculture and Turf segment experienced a 15% increase in net sales and improved operating profit due to higher volumes, pricing, and reduced warranty costs.
- **Positive Financial Services Outlook:** Financial Services segment net income increased significantly, benefiting from a higher average portfolio and lower credit loss provisions, with expectations for continued growth in FY2019.
- **Positive Fiscal Year 2019 Outlook:** Deere projects a 7% increase in equipment sales for fiscal year 2019, with a target net income of approximately $3.6 billion.
- **Shareholder Returns:** The company continued to return value to shareholders through dividends and share repurchases, with $2.31 billion remaining on its share repurchase plan at year-end.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-KFY2018filed December 17, 2018Financial Statements
FY2018 against FY2017
| Line item | FY2018FY2017 | Change |
|---|---|---|
| Revenue | $37.36B$29.74B | +25.6% |
| R&D Expenses | $1.66B$1.37B | +20.8% |
| SG&A Expenses | $3.46B$3.10B | +11.5% |
| Operating Expenses | $33.29B$26.58B | +25.2% |
| Operating Income | $4.48B$3.57B | +25.2% |
| Interest Expense | $1.20B$899.00M | +33.9% |
| Net Income | $2.37B$2.16B | +9.7% |
| EPS (Basic) | $7.34$6.76 | +8.6% |
| EPS (Diluted) | $7.24$6.68 | +8.4% |
| Shares Outstanding (Basic) | 322.60M319.50M | +1.0% |
| Shares Outstanding (Diluted) | 327.30M323.30M | +1.2% |
05—Questions
Frequently Asked Questions
What was Deere & Company's net income in fiscal year 2018?
For the fiscal year ending October 27, 2018, Deere & Company reported a net income attributable to Deere & Company of $2.37 billion, or $7.24 per diluted share.
What was the primary driver of Deere's revenue growth in 2018?
Deere's total net sales and revenues grew significantly by 26% to $37.36 billion in fiscal year 2018. The acquisition of the Wirtgen Group in December 2017 was a major contributor, adding 12% to the net sales for the year. Strong performance in the Agriculture and Turf segment, driven by higher shipment volumes and price realization, also played a key role.
What is Deere's outlook for fiscal year 2019?
Deere anticipates continued growth in fiscal year 2019, projecting an increase in total net sales and revenues of approximately 7%. This growth is expected to be supported by a full year of Wirtgen Group sales and positive market conditions in agriculture and construction. The company forecasts net income attributable to Deere & Company to be around $3.6 billion.
How did the Wirtgen acquisition impact the Construction and Forestry segment?
The acquisition of Wirtgen Group significantly boosted the Construction and Forestry segment's performance. Net sales for this segment increased by 78% in fiscal year 2018, with Wirtgen contributing 53% of that increase. Wirtgen also contributed $116 million to the segment's operating profit in 2018.
06—Continue