8-KOther Events

DEERE & CO 8-K Report (Aug 14, 2001)

Filed August 14, 2001For Securities:DE

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.

Frequently Asked Questions

The primary driver for the decrease in net income was the general economic slowdown and low farm commodity prices, which impacted demand across Deere's business segments, particularly in agricultural, commercial & consumer, and construction & forestry equipment.

Deere & Company anticipates significant pressure on fourth-quarter profit margins due to reduced production levels resulting from ongoing weak market conditions. The company is implementing further production cutbacks across its divisions and expects a challenging quarter.

Deere is taking aggressive actions including rigorous asset management, expense reduction, additional production cutbacks, and an early-retirement program. The company is also heavily focused on developing and introducing a record number of new products to enhance customer productivity and extend market leadership.

The stronger U.S. dollar had a negative impact on Deere's reported sales. Excluding the effect of currency fluctuations, overseas sales were flat for the quarter and up 8% year-to-date, indicating underlying demand resilience in international markets.