Summary
Deere & Company (DE) reported financial results for the third quarter ended August 2, 2020, with a notable decline in net sales and revenues compared to the prior year, reflecting the economic impact of the COVID-19 pandemic. Despite the top-line decrease, the company demonstrated operational resilience, with improvements in operating profit for the Agriculture and Turf segment driven by price realization and cost management. However, the Construction and Forestry segment experienced a significant drop in sales and operating profit due to lower shipment volumes. The company maintained a strong liquidity position with substantial cash and cash equivalents, enabling it to navigate the uncertain economic environment. Management is actively implementing strategic initiatives to enhance efficiency and agility, including employee separation programs aimed at cost reduction and organizational streamlining. Investors should monitor the ongoing impact of COVID-19 on global demand, supply chain stability, and customer financial health.
Financial Highlights
44 data points| Revenue | $8.93B |
| Gross Profit | $2.02B |
| R&D Expenses | $370.00M |
| SG&A Expenses | $752.00M |
| Operating Expenses | $7.66B |
| Operating Income | $1.39B |
| Interest Expense | $290.00M |
| Net Income | $811.00M |
| EPS (Basic) | $2.59 |
| EPS (Diluted) | $2.57 |
| Shares Outstanding (Basic) | 313.00M |
| Shares Outstanding (Diluted) | 315.80M |
Key Highlights
- 1Net sales and revenues for the third quarter decreased by 11% to $8.925 billion compared to $10.036 billion in the prior year, primarily impacted by the COVID-19 pandemic.
- 2Net income attributable to Deere & Company for the third quarter was $811 million, or $2.57 per diluted share, down from $899 million, or $2.81 per diluted share, in the prior year.
- 3The Agriculture and Turf segment saw a 5% decrease in net sales but a significant 54% increase in operating profit, driven by price realization and expense control.
- 4The Construction and Forestry segment experienced a substantial 28% decline in net sales and a 46% decrease in operating profit, reflecting weaker market demand.
- 5The company maintained a strong liquidity position, with cash and cash equivalents totaling $8.190 billion at the end of the quarter.
- 6Deere implemented voluntary employee-separation programs to reduce operating costs and improve efficiency, with an estimated annual savings of $260 million for programs expected to be completed in 2020.
- 7The company provided short-term payment relief to dealers and customers impacted by COVID-19, affecting approximately 4-5% of its trade receivables, financing receivables, and operating lease portfolio balances.