10-QPeriod: Q2 FY2012

DEERE & CO Quarterly Report for Q2 Ended Apr 30, 2012

Filed May 31, 2012For Securities:DE

Summary

Deere & Company (DE) reported strong financial results for the quarter ending April 30, 2012, with net sales and revenues increasing significantly year-over-year. This growth was driven by robust performance in both the Agriculture and Turf, and Construction and Forestry segments, indicating a healthy demand for the company's equipment. The company's financial services division also contributed positively, showing growth in its credit portfolio. Despite some economic uncertainties globally, Deere & Company demonstrated resilience and a positive outlook, with projected sales increases and solid net income for the fiscal year. Key financial indicators show improved profitability and revenue generation compared to the previous year. The company's strong operational performance, coupled with strategic pricing and volume increases, has successfully offset rising production costs and R&D investments. Investors can take comfort in the company's continued ability to navigate market conditions and deliver shareholder value, supported by favorable agricultural economics and product innovation.

Financial Highlights

43 data points
Beta

Revenue

$10.01B

25.7% Gross Margin

Net Income

$1.06B

10.6% Net Margin

EPS (Diluted)

$2.61

Total Assets

$51.41B

Cash & Equivalents

$3.02B

Free Cash Flow

-$544.50M

Financial Statements
Beta
Revenue$10.01B
Cost of Revenue$6.83B
Gross Profit$2.57B
R&D Expenses$352.00M
SG&A Expenses$881.40M
Operating Income$1.70B
Interest Expense$195.70M
Net Income$1.06B
EPS (Basic)$2.64
EPS (Diluted)$2.61
Shares Outstanding (Basic)400.20M
Shares Outstanding (Diluted)404.70M

Key Highlights

  • 1Net sales and revenues for the three months ended April 30, 2012, reached $10,008.6 million, a significant increase from $8,909.7 million in the prior year period.
  • 2Net income attributable to Deere & Company for the quarter was $1,056.2 million, or $2.61 per diluted share, up from $904.3 million, or $2.12 per diluted share, in the same period last year.
  • 3The Agriculture and Turf segment saw a 11% increase in net sales for the quarter, reaching $7,735 million, driven by higher shipment volumes and price realization.
  • 4The Construction and Forestry segment experienced a substantial 26% increase in net sales, totaling $1,670 million, primarily due to higher shipment volumes and price realization.
  • 5Financial Services operations reported an operating profit of $175 million, an increase from $163 million in the prior year's quarter, driven by growth in the credit portfolio.
  • 6The company provided a positive outlook, forecasting company equipment sales to increase by about 15% for fiscal year 2012 and anticipating net income attributable to Deere & Company of about $3,350 million.
  • 7Deere & Company repurchased approximately 4.385 million shares of its common stock during the second quarter of 2012.

Frequently Asked Questions

The primary driver of the revenue increase was strong performance across both the Agriculture and Turf segment, which saw an 11% rise in sales, and the Construction and Forestry segment, which experienced a significant 26% increase in sales. This was largely due to higher shipment volumes and effective price realization in both segments.

The Financial Services segment showed improved profitability with an operating profit of $175 million for the quarter, up from $163 million in the prior year. This growth was primarily attributed to an expanding credit portfolio, although partially offset by increased selling, administrative, and general expenses.

Deere & Company provided a positive outlook, forecasting company equipment sales to increase by approximately 15% for the full fiscal year 2012. They also anticipate net income attributable to Deere & Company to be around $3,350 million for the fiscal year.

Yes, the report mentions that operating profit was partially offset by higher production costs related to new products and engine emission requirements, as well as increased raw material costs and higher research and development expenses. These factors are being managed through price realization and volume increases.