John Deere sales down 20 percent in FY2015

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FSR John Deere tillage

MOLINE, Ill. — Deere & Company worldwide net sales and revenues decreased 25 percent for the fourth quarter and were down 20 percent for the full year. The equipment manufacturer reported its earnings Nov. 25.

Net income was $351.2 million for the fourth quarter that ended Oct. 31, compared with $649.2 million for the same period of 2014. For fiscal 2015, net income attributable to Deere & Company was $1.940 billion, compared with $3.162 billion last year. Net sales of the John Deere equipment operations were $5.932 billion for the quarter and $25.775 billion for the year, compared with $8.043 billion and $32.961 billion for the same periods in 2014.

Still profitable

Even in the face of the weak market, Samuel R. Allen, chairman and chief executive officer, said sales and earnings for the year were the sixth-highest in company history. Equipment net sales in the United States and Canada decreased 23 percent for the quarter and 18 percent for the full year. Outside the U.S. and Canada, net sales fell 31 percent for the quarter and were down 28 percent for the year.

Deere’s equipment operations reported operating profit of $335 million for the quarter and $2.177 billion for the full year, compared with $910 million and $4.297 billion in 2014. Net income of the company’s equipment operations was $200 million for the fourth quarter and $1.308 billion for the year, compared with $488 million and $2.548 billion in 2014.

Ag sales

John Deere sales fell 25 percent for the quarter and full year. Operating profit was $271 million for the quarter and $1.649 billion for the year, compared with $682 million and $3.649 billion in 2014. Construction and forestry sales decreased 32 percent for the quarter and 9 percent for the year. Operating profit was $64 million for the quarter and $528 million for the year, compared with $228 million and $648 million in 2014.

Financial services

Deere & Company financial services reported net income of $153.0 million for the quarter and $632.9 million for the year, compared with $172.2 million and $624.5 million in 2014. Results for the year improved due to growth in the average credit portfolio, the previously announced crop insurance sale and higher crop insurance margins experienced prior to divestiture.

2016 outlook

Company equipment sales are projected to decrease about 7 percent for fiscal 2016 and to be down about 11 percent for the first quarter compared with year-ago periods.

Deere’s worldwide sales of agriculture and turf equipment are forecast to decrease by about 8 percent for fiscal year 2016. Industry sales for agricultural equipment in the U.S. and Canada are forecast to be down 15 to 20 percent for 2016. The decline, which reflects the impact of low commodity prices and stagnant farm incomes, is expected to be most pronounced in the sale of higher-horsepower models.

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