Summary
Deere & Company (DE) reported a strong recovery in its first quarter of fiscal year 2019, as evidenced by a significant increase in net sales and a return to profitability after a loss in the prior year's comparable period. Net sales and revenues grew by 15% to $7.98 billion, driven by robust performance in both the Agriculture & Turf and Construction & Forestry segments. The company posted a net income of $498.5 million, or $1.54 per diluted share, a substantial improvement from a net loss of $535.1 million, or ($1.66) per diluted share, in the first quarter of fiscal year 2018. The improved financial results reflect higher shipment volumes, price realization, and the ongoing integration of Wirtgen's operations. While the company experienced higher production costs and warranty expenses, these were largely offset by pricing strategies and increased sales. Despite some market uncertainties, including trade policies and commodity price volatility, Deere projects continued growth for fiscal year 2019, anticipating a net income of approximately $3.6 billion, showcasing confidence in its strategic positioning and technological advancements.
Financial Highlights
45 data points| Revenue | $7.98B |
| Gross Profit | $1.51B |
| R&D Expenses | $407.00M |
| SG&A Expenses | $764.00M |
| Operating Expenses | $7.31B |
| Operating Income | $769.00M |
| Interest Expense | $353.00M |
| Net Income | $498.00M |
| EPS (Basic) | $1.56 |
| EPS (Diluted) | $1.54 |
| Shares Outstanding (Basic) | 318.50M |
| Shares Outstanding (Diluted) | 322.70M |
Key Highlights
- 1Net sales and revenues increased by 15% to $7.98 billion for the three months ended January 27, 2019, compared to $6.91 billion in the prior year period.
- 2The company returned to profitability, reporting a net income attributable to Deere & Company of $498.5 million ($1.54 per diluted share), a significant turnaround from a net loss of $535.1 million ($1.66 per diluted share) in the prior year.
- 3Equipment Operations saw a 16% increase in net sales, driven by strong performance in Agriculture & Turf (+10%) and Construction & Forestry (+31%), with the latter boosted by the inclusion of Wirtgen.
- 4Financial Services operating profit decreased by 12% due to less favorable financing spreads, though the average portfolio balance increased by 7%.
- 5The company continues to invest in research and development, with R&D expenses increasing by 14% year-over-year.
- 6Deere & Company maintained a stable credit rating with a 'Stable' outlook from Fitch, Moody's, and S&P, indicating confidence in its financial health.
- 7The company forecasts full-year fiscal 2019 net income attributable to Deere & Company to be approximately $3.6 billion, signaling a positive outlook for the remainder of the year.