Deere Reports Record Fourth-Quarter Earnings, Misses Analysts’ Estimates

A larger fourth-quarter profit still wasn’t enough to hit analyst’s expectations for farm and construction equipment maker Deere & Co., which reported its quarterly earnings Nov. 21.
As Deere sold more equipment at increased prices, its net income rose 2.7 percent for the quarter ending Oct. 31 to $687.6 million–$1.75 per share. Although revenue rose by a full 14 percent to $9.79 billion, analysts surveyed by FactSet had forecast earnings of $1.88 per share. Still, compared to the company’s net income a year ago, $669.6 million or $1.62 a share, the quarter could be counted a success.

Part of that success could be attributed to a 4-percent increase in equipment prices, although some of sales gains were counterbalanced by unfavorable currency exchange rates. Still, equipment sales increased to more than $9 billion, surpassing analysts’ expectations of $8.93 billion. In fact, sales in the U.S. and Canada rose by 26 percent. Agriculture and turf equipment sales rose 16 percent, while forestry and construction equipment sales increased 7 percent.

“In the face of continuing global economic pressure, John Deere has completed another record year,” said Samuel R. Allen, Deere chairman and chief executive officer. “Our success reflects positive customer response to our lines of innovative equipment coupled with extensive efforts to expand our global competitive position.”

Over the past year, Deere has continued to introduce new products, as well as open factories in new markets including China, India and Brazil. The company expects its 2013 net income will reach about $3.2 billion.

“John Deere’s performance illustrates the continuing impact of our operating model, which stresses a disciplined approach to cost and asset management,” Allen said. “As a result, we are achieving strong financial results and generating high levels of cash flow. These dollars are funding growth activities throughout the world and providing value directly to investors.”