Summary
Deere & Company reported strong performance for the third quarter and nine months ended July 31, 2012, with net sales and revenues increasing significantly across its segments, particularly in Agriculture and Turf, and Construction and Forestry. Net income attributable to Deere & Company saw a substantial rise year-over-year, reflecting higher shipment volumes, effective price realization, and improved operational efficiencies. The company also maintained a solid financial position with robust liquidity. Despite some headwinds such as increased production and raw material costs, and unfavorable foreign currency translation effects, Deere & Company's outlook for the full fiscal year 2012 remained positive. The company anticipates continued sales growth and robust field activity in the upcoming crop year, supported by favorable global agricultural trends and a strong U.S. construction market. However, management noted ongoing concerns regarding the global economic recovery, sovereign debt, and credit availability, which warrant continued monitoring.
Financial Highlights
42 data points| Revenue | $9.59B |
| Cost of Revenue | $6.76B |
| Gross Profit | $2.17B |
| R&D Expenses | $367.80M |
| SG&A Expenses | $878.40M |
| Operating Income | $1.30B |
| Interest Expense | $194.90M |
| Net Income | $788.00M |
| EPS (Basic) | $2.00 |
| EPS (Diluted) | $1.98 |
| Shares Outstanding (Basic) | 394.70M |
| Shares Outstanding (Diluted) | 398.80M |
Key Highlights
- 1Net sales and revenues increased 15% to $9.59 billion for the third quarter of 2012 compared to $8.37 billion in the prior year, driven by strong performance in Agriculture and Turf (+14%) and Construction and Forestry (+23%).
- 2Net income attributable to Deere & Company rose to $788.0 million ($1.98 per share) for the third quarter, up from $712.3 million ($1.69 per share) in the same period last year.
- 3For the first nine months of the fiscal year, net sales and revenues increased 13% to $26.37 billion, and net income attributable to Deere & Company grew to $2.38 billion ($5.88 per share) from $2.13 billion ($5.01 per share) in the prior year.
- 4The company's financial services segment reported a decrease in net income attributable to Deere & Company for the quarter and nine months, primarily due to increased expenses and narrower financing spreads.
- 5Inventories saw a significant increase of $1.5 billion in the first nine months of 2012, primarily due to seasonal demand and higher production levels.
- 6Deere & Company maintained a strong liquidity position with cash and cash equivalents and marketable securities totaling $4.94 billion at July 31, 2012.
- 7The company's outlook for fiscal year 2012 projects equipment sales to increase by approximately 13% and anticipates net income attributable to Deere & Company to be around $3.1 billion.