Deere Reports Second Quarter Earnings of $472 Million

By Jim.Robinson|May 26, 2009

Deere & Company announced worldwide net income of $472.3 million, or $1.11 per share, for the second quarter ended April 30, compared with $763.5 million, or $1.74 per share, for the same period last year. For the first six months of the year, net income was $676.2 million, or $1.60 per share, compared with $1.133 billion, or $2.56 per share, last year.

Worldwide net sales and revenues declined 17%, to $6.748 billion, for the second quarter and were down 11% to $11.894 billion for six months compared with a year ago. Net sales of the equipment operations were $6.187 billion for the quarter and $10.747 billion for six months, compared with $7.469 billion and $11.999 billion last year.

“John Deere has completed a profitable quarter and is successfully executing plans to maintain solid performance in today’s difficult economic environment,” said Robert W. Lane, chairman and chief executive officer. “We are benefiting from a strong market for large farm machinery in the United States and from our continued focus on balancing production with retail activity.” At the same time, the global recession and volatile foreign exchange rates have put pressure on overall results. “Clearly, operations dependent on construction activity and consumer spending are feeling the full impact of the sharp downturn,” Lane said. Also of note, the company has continued to benefit from a strong liquidity position and access to global capital markets on a competitive basis.

Agricultural sales decreased 4% for the quarter, largely due to the unfavorable effects of currency translation and lower shipment volumes, partially offset by improved price realization. Division sales were up 4% for six months. Operating profit was $635 million for the quarter and $983 million year to date, compared with $782 million and $1.114 billion for the respective periods last year.

Operating profit was lower in the quarter primarily due to lower shipment and production volumes, higher raw-material costs, unfavorable impacts of foreign exchange and higher research and development expenses, partially offset by improved price realization. Six-month operating profit was lower largely due to higher raw-material costs, unfavorable foreign-exchange effects and higher research and development expenses, partially offset by improved price realization.