Summary
Deere & Company (DE) reported its fiscal second quarter results for the period ending May 3, 2020. The company experienced a significant year-over-year decline in net sales and revenues, down 18% to $9.25 billion, impacted by lower shipment volumes across its Agriculture and Turf, and Construction and Forestry segments. This was largely attributed to the economic disruptions and uncertainties caused by the COVID-19 pandemic, which affected customer demand, supply chains, and production. Despite the revenue decrease, the company demonstrated resilience by managing costs effectively, leading to a decrease in operating profit by 37% to $965 million. Net income attributable to Deere & Company fell 41% to $666 million, resulting in diluted earnings per share of $2.11, down from $3.52 in the prior year's comparable period. The company proactively bolstered its liquidity position during the quarter, significantly increasing its cash and cash equivalents and issuing new debt, while also suspending share repurchases and reducing planned capital expenditures in response to the uncertain economic outlook. Management highlighted the company's essential business designation and its efforts to protect employees and maintain operations to serve customers.
Financial Highlights
45 data points| Revenue | $9.25B |
| Gross Profit | $1.93B |
| R&D Expenses | $406.00M |
| SG&A Expenses | $906.00M |
| Operating Expenses | $8.32B |
| Operating Income | $965.00M |
| Interest Expense | $342.00M |
| Net Income | $666.00M |
| EPS (Basic) | $2.13 |
| EPS (Diluted) | $2.11 |
| Shares Outstanding (Basic) | 313.20M |
| Shares Outstanding (Diluted) | 316.20M |
Key Highlights
- 1Net sales and revenues decreased by 18% to $9.25 billion compared to the prior year's quarter, primarily driven by lower shipment volumes in the Agriculture and Turf and Construction and Forestry segments, exacerbated by the COVID-19 pandemic.
- 2Operating profit declined by 37% to $965 million, reflecting the impact of lower sales volumes and production inefficiencies, although partially offset by cost management initiatives.
- 3Net income attributable to Deere & Company decreased by 41% to $666 million, leading to diluted earnings per share of $2.11, down from $3.52 in the same period last year.
- 4The company significantly strengthened its liquidity position, with cash and cash equivalents rising to $8.9 billion as of May 3, 2020, supported by new debt issuances and disciplined expense management.
- 5Impairment charges of $114 million pretax were recognized, primarily related to fixed assets, operating lease equipment, and an investment in a construction equipment company, reflecting the economic impact of COVID-19.
- 6The company provided short-term payment relief to some dealers and customers on trade receivables, financing receivables, and operating lease payments due to COVID-19 impacts.