Summary
Deere & Company reported a profitable third quarter for fiscal year 2001, albeit with a significant year-over-year decline in net income to $71.8 million ($0.30 per share) from $172.4 million ($0.72 per share) in the prior year. This performance reflects the ongoing general economic slowdown and depressed farm commodity prices impacting demand across its key segments. Despite these challenging conditions, the company maintained profitability through rigorous asset management and expense reduction efforts. The outlook for the fourth quarter remains under pressure, with anticipated further production cutbacks and margin compression. The company is implementing aggressive actions, including production adjustments and an early retirement program, which are expected to adversely impact fourth-quarter results. Deere & Company is also focused on new product development to enhance competitiveness and drive future performance, aiming for improved results across business cycles and higher returns for investors.
Key Highlights
- 1Third-quarter net income was $71.8 million ($0.30 per share), down from $172.4 million ($0.72 per share) in the prior year, due to weak economic conditions and low farm commodity prices.
- 2Worldwide net sales and revenues for the third quarter were $3.584 billion, a slight decrease from $3.632 billion in the comparable period last year.
- 3Net sales for the quarter, excluding acquisitions and the impact of currency exchange rates, decreased by 6%.
- 4Deere's credit operations reported net income of $41 million for the quarter, down from $47 million last year, primarily due to lower gains on retail notes and higher write-offs.
- 5The company anticipates significant pressure on fourth-quarter profit margins due to reduced production levels.
- 6Further production cutbacks are planned across agricultural, commercial & consumer, and construction & forestry equipment divisions for the fourth quarter.
- 7Deere projects breakeven performance for the full fiscal year 2001, including an estimated $140 million after-tax cost for an early-retirement program.