POST Online Media Lite Edition



 

Deere & Company Q2 net income $2.03 per share

Staff writer |
Net income attributable to Deere & Company was $690.5 million, or $2.03 per share, for the second quarter ended April 30, compared with $980.7 million, or $2.65 per share, for the same period last year.

Article continues below






For the first six months of the year, net income attributable to Deere & Company was $1.077 billion, or $3.14 per share, compared with $1.662 billion, or $4.46 per share, last year.

Worldwide net sales and revenues decreased 18 percent, to $8.171 billion, for the second quarter and decreased 17 percent, to $14.554 billion, for six months.

Net sales of the equipment operations were $7.399 billion for the quarter and $13.004 billion for six months, compared with $9.246 billion and $16.195 billion for the periods last year.

Net sales of the worldwide equipment operations declined 20 percent for the quarter and six months compared with the same periods a year ago. Sales included price realization of 2 percent for both periods and an unfavorable currency-translation effect of 5 percent for the quarter and 4 percent for six months.

Equipment net sales in the United States and Canada decreased 14 percent for the quarter and year to date. Outside the U.S. and Canada, net sales decreased 28 percent for the quarter and six months, with unfavorable currency-translation effects of 10 percent and 8 percent for the periods.

Deere's equipment operations reported operating profit of $828 million for the quarter and $1.242 billion for six months, compared with $1.361 billion and $2.252 billion last year.

The declines for both periods were due primarily to lower shipment volumes, the impact of a less favorable product mix and the unfavorable effects of foreign-currency exchange, partially offset by price realization and lower selling, administrative and general expenses.

Net income of the company's equipment operations was $524 million for the second quarter and $764 million for the first six months, compared with $838 million and $1.381 billion in 2014.

In addition to the operating factors mentioned above, a lower effective tax rate benefited both quarterly and six-month results.

Financial services reported net income attributable to Deere & Company of $169.8 million for the quarter and $326.6 million for six months compared with $147.7 million and $289.9 million last year.

The quarter's improvement was primarily due to a gain on the previously announced sale of the crop insurance business, partially offset by less favorable financing spreads. Benefiting year-to-date results was the crop insurance divestiture and higher crop insurance margins prior to the sale, as well as growth in the credit portfolio.

These factors were partially offset by less favorable financing spreads. Last year's six-month results benefited from a more favorable effective tax rate.

Company equipment sales are projected to decrease about 19 percent for fiscal 2015 and to be about 17 percent lower for the third quarter compared with year-ago periods.

Included in the forecast is a negative foreign-currency translation effect of about 4 percent for the full year and 6 percent for the third quarter. For fiscal 2015, net income attributable to Deere & Company is anticipated to be about $1.9 billion.


What to read next

Deere & Company announces 62% increase in Q2 bottom line
Deere & Company Q4 earnings up 79%
Deere & Co. EPS up to $2.56 from $1.98