Deere & Company (NYSE: DE) reported that their Industry sales for agricultural equipment in the U.S. and Canada are expected to fall over 5 percent for 2017, on the back challenges in the livestock sector and the ongoing decline of crop prices. This fall is hurting large as well as small equipment. Moreover, for full-year of 2017, the industry sales in the EU28 member nations is expected to be flat to down 5%, wherein the fall is mainly on the back of weakness in commodity prices and farm incomes. Asian sales are expected to be flat or fall slightly. Industry sales of turf and utility equipment performance in the U.S. and Canada is also forecasted to be flat for 2017. But, South American industry sales of tractors and combines are expected to be up over 20% on the back of a better economic and political conditions in Brazil and Argentina. The group’s agriculture and turf equipment sales is expected to rise by over 9% for fiscal-year 2017, including a positive currency-translation effect of about 1 percent.
John Deere Forum, Mannheim, Germany
Moreover, the group expects their net income for the financial services operations to be over $475 million for fiscal year of 2017 wherein decrease in losses on lease residual values, would offset rising selling, administrative and general expenses, less-favorable financing spreads and a better provision for credit losses.
For the third quarter of 2017, the group’s Net income enhanced to $641.8 million, or $1.97 per share, from $488.8 million, or $1.55 per share, for the quarter ended July 31, 2016. Overall net sales and revenues enhanced 16%, to $7.808 billion, during the third quarter while rose 8%, to $21.720 billion, for the first nine months.
The group’s equipment operations reported an operating profit of $795 million for the quarter and $2.152 billion for nine months, against $625 million and $1.526 billion, respectively, for the same period last year. This better performance is on the back of a rise in shipment volumes and price realization, which offset rising production costs, selling, administrative and general expenses and warranty costs.