Summary
Deere & Company's 8-K filing from May 13, 2003, provides a mid-year update on its financial performance for the six months ending April 30, 2003, compared to the same period in 2002. The report highlights significant growth in net sales across all major equipment segments, particularly in Agricultural Equipment, which saw an increase from $5,347 million to $6,141 million. Overall, the company demonstrates improved operating profitability, with operating profit for Equipment Operations rising substantially from $82 million to $382 million, leading to a higher operating return on assets.
Key Highlights
- 1Net sales for the six months ended April 30, 2003, increased to $6,141 million for Agricultural Equipment, $3,437 million for Commercial and Consumer Equipment, and $1,475 million for Construction & Forestry, compared to $5,347 million, $3,088 million, and $1,241 million, respectively, in the prior year.
- 2Equipment Operations' operating profit significantly improved, reaching $382 million for the first six months of 2003, a substantial increase from $82 million in the same period of 2002.
- 3Operating return on assets for Equipment Operations (with inventories at LIFO) improved to 6.3% for the period, up from 1.3% in the prior year, indicating enhanced asset efficiency.
- 4Shareholder Value Added (SVA) for Financial Services was $28 million for the period, down from $39 million in the prior year, though SVA Income before cost of equity was $241 million.
- 5Deere & Company is actively using Shareholder Value Added (SVA) as a key performance metric for management, linking it to business unit performance goals and compensation.
- 6The company targets an annual operating return on operating assets (OROA) of 20% for its equipment segments at normal sales volumes, with the current period showing progress towards this goal.
- 7Net income for the six months ended April 30, 2003, was $150 million, compared to $132 million in the prior year, reflecting overall profitability gains.