Summary
Deere & Company's (DE) third-quarter and nine-month 2015 results reflect a significant downturn in agricultural and construction machinery markets, impacting net sales and income. Worldwide net sales and revenues declined by 20% for the quarter and 18% for the nine months compared to the prior year, largely driven by lower shipment volumes and unfavorable currency translation effects, particularly in the Agriculture and Turf segment. Despite these challenging market conditions, all segments remained profitable, a testament to the company's responsive cost structure and focus on business plan execution. The Financial Services segment showed resilience, with net income attributable to Deere & Company for the nine months improving due to the crop insurance divestiture and a growing credit portfolio, though offset by less favorable financing spreads. The company is focusing on product innovation and strategic investments to navigate the current economic climate and position itself for future growth.
Financial Highlights
45 data points| Revenue | $7.59B |
| Cost of Revenue | $5.36B |
| Gross Profit | $1.48B |
| R&D Expenses | $346.80M |
| SG&A Expenses | $755.30M |
| Operating Expenses | $6.86B |
| Operating Income | $840.00M |
| Interest Expense | $171.50M |
| Net Income | $512.00M |
| EPS (Basic) | $1.54 |
| EPS (Diluted) | $1.53 |
| Shares Outstanding (Basic) | 331.40M |
| Shares Outstanding (Diluted) | 334.10M |
Key Highlights
- 1Net income attributable to Deere & Company decreased significantly year-over-year, with Q3 net income at $511.6 million ($1.53/share) down from $850.7 million ($2.33/share) in Q3 2014.
- 2Worldwide net sales and revenues saw a substantial decline, down 20% in Q3 to $7.59 billion and down 18% for the nine months to $22.15 billion, primarily due to lower shipment volumes in equipment operations.
- 3The Agriculture and Turf segment experienced a 24% sales decrease in Q3 and a 25% decrease for the nine months, reflecting the downturn in the agricultural economy.
- 4The Construction and Forestry segment sales decreased 13% in Q3, with nine-month sales remaining flat year-over-year.
- 5Financial Services segment net income for the nine months improved slightly to $480.0 million from $452.2 million in the prior year, driven by a crop insurance divestiture and portfolio growth, despite less favorable financing spreads.
- 6Deere repurchased approximately $1.83 billion of common stock in the first nine months of 2015, indicating a commitment to returning capital to shareholders.
- 7The company maintained solid liquidity, with cash and cash equivalents and marketable securities totaling $4.55 billion at July 31, 2015.