Summary
Deere & Company's first quarter 2010 results show a rebound in profitability compared to the prior year, driven by improved financing spreads in its Financial Services segment and cost management in its Equipment Operations. While overall net sales and revenues saw a slight decline year-over-year, the company demonstrated resilience, with net income attributable to Deere & Company increasing by 19%. This improvement was supported by a favorable mix of products and pricing, alongside effective cost controls. The company's outlook for fiscal year 2010 projects a rebound in equipment sales, particularly in construction and forestry, and sustained profitability in financial services. Despite ongoing concerns about the global economic recovery and credit market conditions, Deere & Company maintains access to liquidity and is strategically positioned to capitalize on its established market presence and focus on long-term agricultural and infrastructure needs.
Financial Highlights
45 data points| Revenue | $4.83B |
| Cost of Revenue | $3.21B |
| Gross Profit | $1.03B |
| R&D Expenses | $235.70M |
| SG&A Expenses | $642.10M |
| Operating Income | $416.00M |
| Interest Expense | $218.50M |
| Net Income | $243.00M |
| EPS (Basic) | $0.57 |
| EPS (Diluted) | $0.57 |
| Shares Outstanding (Basic) | 423.60M |
| Shares Outstanding (Diluted) | 427.50M |
Key Highlights
- 1Net income attributable to Deere & Company increased by 19% to $243.2 million, or $0.57 per share, from $203.9 million, or $0.48 per share, in the prior year's first quarter.
- 2Worldwide net sales and revenues decreased by 6% to $4.835 billion, reflecting a 7% decline in Equipment Operations' net sales to $4.237 billion.
- 3The Financial Services segment reported a significant increase in net income to $85.1 million, up from $46.8 million in the prior year, primarily due to improved financing spreads.
- 4Operating profit for the Equipment Operations improved due to lower raw material costs, better price realization, and favorable currency effects, partially offset by lower shipment volumes.
- 5The company forecasts a rebound in equipment sales for fiscal year 2010, projecting a 6-8% increase, with construction and forestry sales expected to rise approximately 21%.
- 6Deere & Company ended the quarter with a strong liquidity position, with $5.043 billion in cash and cash equivalents.
- 7Despite a challenging economic environment, the company's credit rating remains solid (A2/A from Moody's/S&P), indicating continued financial stability.