1ST QUARTER: DEERE'S SALES DOWN 4%, EARNINGS UP 4%
Mar. 2, 2020
Source: Deere & Co. news release
*Net income rises 4% on 6% decline in net sales.
*U.S. farm sector shows early signs of stabilization.
*Full-year earnings forecast unchanged.
Moline, Illinois- Deere & Company reported net income of $517 million for the first quarter ended February 2, 2020, or $1.63 per share, compared with net income of $498 million, or $1.54 per share, for the quarter ended January 27, 2019. Worldwide net sales and revenues decreased 4 percent in the first quarter of 2020 to $7.631 billion. Net sales of the equipment operations were $6.530 billion for the quarter, compared with $6.941 billion in 2019.
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"John Deere's first-quarter performance reflected early signs of stabilization in the U.S. farm sector," said John C. May, chief executive officer. "Farmer confidence, though still subdued, has improved due in part to hopes for a relaxation of trade tensions and higher agricultural exports.
"At the same time, activity in the construction sector has slowed leading to lower sales and profit for our Construction & Forestry division. Also impacting results in Deere's construction equipment business were our actions to reduce factory production and lower inventories in response to current market conditions.
"Additionally, the quarter included costs of a voluntary employee-separation program, which is among the steps Deere is taking to improve flexibility and efficiency."
Company Outlook & Summary
Net income attributable to Deere & Company for fiscal 2020 is forecast to be in a range of $2.7 billion to $3.1 billion.
"Looking ahead, we are particularly encouraged by the broad use of precision technologies and believe the company is well-positioned to strengthen its leadership in this vital area," May said. "In addition, we are proceeding with a series of measures to create a more focused organizational structure that can operate with greater speed and agility. These steps are leading to improved efficiencies and helping the company focus its resources and investments on areas that have the most impact on performance."