Deere holds ground in 1st quarter
Deere results up but equipment sales remain soft.
John Deere has reported first quarter net sales and revenues up two per cent compared to last year, however equipment operations sales were down.
The results - which saw revenue increase to $US5.625 billion compared to $US5.525 billion for the same quarter last year, were good enough for chairman, Samuel R. Allen to declare “a positive note in the continued face of soft market conditions”.
Net sales of the equipment operations were $US4.698 billion for the quarter compared with $US4.769 billion a year ago
Mr Allen said "although the quarter's sales and earnings were somewhat lower than last year, all of our businesses remained solidly profitable.
“At the same time, we are seeing signs that after several years of steep declines key agricultural markets may be stabilising."
Company equipment sales are projected to increase about 4.0 pc for fiscal 2017 and be up about 1.0pc for the second quarter compared with the same periods of 2016, the company said.
Agriculture and turf equipment sales were unchanged for the quarter with lower shipments and higher warranty costs offset by improved pricing and favorable currency exchange.
Operating profit in the segment was $US213 million compared with $US144 million last year.
Deere is forecasting worldwide sales of agriculture and turf equipment to increase about 3.0pc for the 2017 financial year.
The company is forecasting industry sales for agricultural equipment in the US and Canada to be down 5 - 10pc for 2017.
“The decline, reflecting weakness in the livestock sector as well as the continuing impact of low crop prices, is expected to affect both large and small equipment,” a statement said.
Full-year 2017 industry sales in the 28 member country EU are tipped to fall about 5.0pc, with Deere attributing the decline to low commodity prices and farm incomes.
South America is a big positive with tractor and harvester sales picked to increase 15 to 20pc as a result of improving economic and political conditions in key markets, Brazil and Argentina.
Asian sales are projected to be flat to up slightly, benefiting from higher sales in India.