Summary
Deere & Company's (DE) 10-Q filing for the period ending April 28, 2019, reveals a mixed financial performance for the second quarter and the first six months of fiscal year 2019 compared to the prior year. While net sales and revenues saw an increase, driven by growth in both the Agriculture and Turf, and Construction and Forestry segments, net income attributable to Deere & Company experienced a decline in the second quarter, primarily due to higher production costs and unfavorable currency translation effects. However, for the six-month period, net income saw a significant increase, largely influenced by a substantial one-time tax benefit in the prior year. The company's outlook for fiscal year 2019 remains cautiously optimistic, with projected sales increases across segments. However, ongoing uncertainties in the agricultural sector, including trade concerns and commodity prices, are leading to a more cautious financial outlook and planned production adjustments. The company continues to focus on its long-term strategies and product innovation, particularly in advanced technology, to drive future growth.
Financial Highlights
45 data points| Revenue | $11.34B |
| Gross Profit | $2.52B |
| R&D Expenses | $457.00M |
| SG&A Expenses | $947.00M |
| Operating Expenses | $9.87B |
| Operating Income | $1.54B |
| Interest Expense | $351.00M |
| Net Income | $1.14B |
| EPS (Basic) | $3.57 |
| EPS (Diluted) | $3.52 |
| Shares Outstanding (Basic) | 317.90M |
| Shares Outstanding (Diluted) | 322.20M |
Key Highlights
- 1Net sales and revenues increased by 6% to $11.34 billion for the second quarter of fiscal 2019 compared to $10.72 billion in the prior year. For the six months ended April 28, 2019, net sales and revenues increased by 10% to $19.33 billion.
- 2Net income attributable to Deere & Company decreased by 6% to $1.13 billion ($3.52 per diluted share) for the second quarter of fiscal 2019, compared to $1.21 billion ($3.67 per diluted share) in the prior year.
- 3For the six months ended April 28, 2019, net income attributable to Deere & Company increased significantly to $1.63 billion ($5.07 per diluted share) compared to $673.2 million ($2.05 per diluted share) in the prior year, largely due to a favorable tax adjustment in the current period and a significant discrete tax expense in the prior year.
- 4The Agriculture and Turf segment saw a 3% increase in net sales for the quarter and a 6% increase for the six months, though operating profit decreased by 4% and 5% respectively.
- 5The Construction and Forestry segment demonstrated strong growth, with net sales increasing by 11% for the quarter and 19% for the six months, benefiting from higher shipment volumes and the inclusion of Wirtgen sales.
- 6The Financial Services segment experienced a 12% revenue increase for the quarter and 11% for the six months, but operating profit declined due to less favorable financing spreads and a higher provision for credit losses.
- 7The company's outlook for fiscal year 2019 projects net income attributable to Deere & Company of approximately $3.3 billion, reflecting cautious optimism despite agricultural sector uncertainties.