Fiscal year is lookin’ green for John Deere

MOLINE, Ill. — Sales and profit in the second quarter at Deere & Company set an all-time quarterly record.

Net income attributable to Deere & Company was $904.3 million, or $2.12 per share, for the second quarter ended April 30.

That compares with $547.5 million, or $1.28 per share, for the same period last year.

Second-quarter 2010 included a tax charge of $129.5 million, related to the enactment of U.S. health care legislation.

For the first six months of the year, net income attributable to Deere & Company was $1.418 billion, or $3.32 per share, compared with $790.7 million, or $1.85 per share, last year.

Worldwide net sales and revenues increased 25 percent the second quarter and were up 26 percent for six months. Net sales of the equipment operations were $13.841 billion for six months, compared with $10.785 billion for the corresponding periods last year.

Sales of large farm machinery, particularly in the United States, Canada and Brazil, are continuing to support the company’s performance. Construction equipment shipments are moving higher in spite of weakness in the residential and commercial construction sectors.

Equipment net sales in the United States and Canada increased 17 percent for the quarter and were up 24 percent year to date.

Outside the U.S. and Canada, net sales were up 45 percent for the quarter and 36 percent for six months, with favorable currency-translation effects of 8 percent and 4 percent for these periods.

Net income of the company’s equipment operations was $797 million for the quarter and $1.193 billion for six months, compared with $454 million and $623 million for the respective periods last year.

Outlook

Company equipment sales are projected to be up 21 to 23 percent for fiscal 2011 and up about 20 percent for the third quarter compared with the same periods a year ago.

For the full year, net income attributable to Deere & Company is anticipated to be about $2.650 billion.

The annual forecast includes a negative impact of approximately $300 million in sales and $70 million in operating profit resulting from the recent Japanese earthquake and tsunami.

Ag, turf divisions

Sales rose 24 percent for the quarter and 23 percent for six months largely due to higher shipment volumes, improved price realization and the favorable effects of currency translation.

Operating profit was $1.163 billion for the quarter and $1.720 billion year to date. Operating profit was higher in both periods primarily due to the impact of higher shipment and production volumes and improved price realization, partially offset by increased raw-material costs and higher selling, administrative and general expenses.

Construction and forestry sales climbed 46 percent for the quarter and 61 percent for six months mainly due to higher shipment volumes and improved price realization.

Demand strong

Worldwide sales of agriculture and turf equipment are forecast to increase by about 20 percent for full-year 2011.

Farmers in most of the world’s major markets are experiencing solid levels of income due to strong global demand for agricultural commodities, low grain stocks in relation to use, and relatively high prices for key crops. Farm commodity prices have escalated sharply since the beginning of the year and are expected to average well above prior-year levels for 2011.

After staging a healthy advance in 2010, industry farm-machinery sales in the U.S. and Canada are forecast to be up 5 to 10 percent for 2011.

Production limits and transitional issues, both associated with the broad launch of Interim Tier 4 emissions-compliant equipment, are having a moderating effect on near-term sales potential.

Industry sales of turf and utility equipment in the U.S. and Canada are expected to be flat after experiencing modest recovery in 2010.