Summary
Deere & Company (DE) reported its third-quarter and year-to-date results for the period ending July 31, 2009. The company experienced a notable decline in net sales and revenues across both its equipment and financial services segments compared to the prior year, reflecting the challenging macroeconomic environment. Net sales for the quarter decreased by 24% to $5.9 billion, and for the nine-month period, they were down 15% to $17.8 billion. This reduction in sales was primarily driven by lower shipment and production volumes, particularly in the Construction and Forestry segment, which saw a 47% decrease in quarterly sales. Despite the sales decline, the company's net income for the third quarter was $420 million ($0.99 per diluted share), compared to $575 million ($1.32 per diluted share) in the same period last year. For the nine months ended July 31, 2009, net income was $1,096 million ($2.59 per diluted share), down from $1,708 million ($3.89 per diluted share) in 2008. The company managed to maintain profitability by focusing on cost control, improved price realization, and operational efficiencies, even as it navigated lower demand and unfavorable currency exchange rates. Looking ahead, Deere & Company anticipates further sales declines for the full year but projects net income of approximately $1.1 billion for fiscal year 2009, demonstrating resilience in a difficult economic climate.
Financial Highlights
43 data points| Revenue | $5.88B |
| Cost of Revenue | $4.06B |
| Gross Profit | $1.23B |
| R&D Expenses | $243.30M |
| SG&A Expenses | $659.50M |
| Interest Expense | $249.30M |
| Net Income | $420.00M |
| EPS (Basic) | $0.99 |
| EPS (Diluted) | $0.99 |
| Shares Outstanding (Basic) | 422.90M |
| Shares Outstanding (Diluted) | 424.80M |
Key Highlights
- 1Net sales and revenues decreased significantly, with a 24% drop in the third quarter to $5.9 billion and a 15% decrease for the first nine months to $17.8 billion, indicating a challenging market environment.
- 2Net income for the third quarter was $420 million ($0.99 per diluted share), a decrease from $575 million ($1.32 per diluted share) in the prior year, reflecting the impact of lower sales volumes.
- 3The Construction and Forestry segment experienced a substantial sales decline of 47% in the third quarter, contributing to an operating loss of $28 million for the segment.
- 4Despite lower revenues, the company reported positive cash flow from operating activities for the first nine months of $483 million, demonstrating an ability to generate cash even in a downturn.
- 5Deere & Company maintained a strong liquidity position, with approximately $4.5 billion in cash and cash equivalents and marketable securities at the end of the third quarter.
- 6The company announced plans to continue operational rationalization, including production cutbacks and restructuring costs, to align with retail demand and improve future efficiency.
- 7Despite projected sales declines, the company forecasts full-year net income of approximately $1.1 billion for fiscal year 2009, highlighting cost management strategies.