Summary
Deere & Company (DE) reported a significant decline in revenue and net income for the second quarter and first six months of fiscal year 2009 compared to the prior year, reflecting the challenging global economic environment. Net sales decreased 17% in the quarter and 10% year-to-date, primarily driven by lower sales in the Construction and Forestry, and Commercial and Consumer Equipment segments. Despite pricing increases, these volume declines, coupled with higher raw material costs and unfavorable currency effects, impacted profitability. While the Agricultural Equipment segment showed some resilience with a slight increase in sales for the year-to-date period, it also experienced reduced operating profit. The Financial Services segment also saw lower net income due to increased provisions for credit losses and narrower financing spreads. Looking ahead, the company forecasts continued sales declines for the full fiscal year and anticipates net income of approximately $1.1 billion, with considerable downside risk. Deere & Company's liquidity remains strong, supported by cash, marketable securities, and access to credit markets, but the company faces significant uncertainties due to the ongoing global economic downturn and its impact on customer demand and credit availability.
Financial Highlights
43 data points| Revenue | $6.75B |
| Cost of Revenue | $4.76B |
| Gross Profit | $1.43B |
| R&D Expenses | $255.70M |
| SG&A Expenses | $688.00M |
| Interest Expense | $269.40M |
| Net Income | $472.00M |
| EPS (Basic) | $1.12 |
| EPS (Diluted) | $1.11 |
| Shares Outstanding (Basic) | 422.70M |
| Shares Outstanding (Diluted) | 423.70M |
Key Highlights
- 1Net sales for the second quarter decreased 17% to $6.19 billion, and for the first six months, decreased 10% to $10.75 billion, compared to the prior year.
- 2Net income for the quarter declined to $472.3 million ($1.11 per share) from $763.5 million ($1.74 per share) in the prior year.
- 3The Construction and Forestry segment experienced a significant sales decline of 55% in the quarter and 44% year-to-date, resulting in operating losses.
- 4The Financial Services segment's net income decreased significantly due to higher provisions for credit losses and narrower financing spreads.
- 5Despite overall sales declines, Agricultural Equipment segment sales were up 4% for the first six months, though operating profit decreased.
- 6The company's liquidity position remains strong with substantial cash and cash equivalents, and access to various funding sources, despite challenging market conditions.
- 7Deere & Company forecasts a further decline in equipment sales for the remainder of fiscal year 2009 and anticipates a full-year net income of approximately $1.1 billion, acknowledging significant downside risk.