Summary
Deere & Company's first quarter fiscal year 2018 results, as of January 28, 2018, show a significant net loss of $535.1 million ($1.66 per share) compared to a profit in the prior year, largely driven by a substantial provisional income tax expense related to the U.S. Tax Cuts and Jobs Act of 2017. This tax reform resulted in a $715.6 million write-down of net deferred tax assets and a $261.6 million tax on repatriated earnings. Despite the net loss, the company reported strong top-line growth with worldwide net sales and revenues up 23% to $6.91 billion, driven by a 27% increase in equipment sales. The acquisition of Wirtgen Group significantly boosted the Construction and Forestry segment's sales by 57%. The company's outlook for fiscal year 2018 remains positive, with projected sales growth and net income, though the full-year impact of tax reform is estimated to be unfavorable. Deere & Company maintains a confident outlook, citing a more durable business model and investments in new products and technologies to drive future value.
Financial Highlights
46 data points| Revenue | $6.91B |
| Cost of Revenue | $4.70B |
| Gross Profit | $1.27B |
| R&D Expenses | $356.80M |
| SG&A Expenses | $705.00M |
| Operating Expenses | $6.40B |
| Operating Income | $636.00M |
| Interest Expense | $286.30M |
| Net Income | -$535.00M |
| EPS (Basic) | $-1.66 |
| EPS (Diluted) | $-1.66 |
| Shares Outstanding (Basic) | 322.80M |
| Shares Outstanding (Diluted) | 322.80M |
Key Highlights
- 1Reported a net loss of $535.1 million ($1.66 per share) for Q1 FY18, a significant decline from net income of $199.0 million ($0.62 per share) in Q1 FY17.
- 2The net loss was heavily impacted by a provisional income tax expense of $965 million due to U.S. tax reform, including deferred tax asset remeasurement and repatriation tax.
- 3Worldwide net sales and revenues increased 23% to $6.91 billion, driven by a 27% increase in equipment sales.
- 4The acquisition of Wirtgen Group, completed in December 2017, significantly boosted Construction and Forestry segment sales, contributing 23% of the segment's 57% growth.
- 5Operating profit for the Equipment Operations was $419 million, up from $255 million in the prior year, excluding the impact of the Wirtgen acquisition's initial operating loss.
- 6Financial Services segment net income increased substantially to $425.3 million from $114.4 million, largely due to a $278.1 million tax benefit from tax reform.
- 7The company reaffirmed its fiscal year 2018 outlook, expecting net income of approximately $2,100 million, despite an estimated $750 million unfavorable impact from tax reform.